SA40 Cash Index Previous 22 Aug
- Last week it was highlighted that the index had reversed off the 49420 level, suggesting the possibility of further downside
- The index has in fact not continued the short term downside move, but rather commenced with a new short term consolidation between levels 48600 and 49420 (highlighted red)
- The stochastic has corrected out of overbought territory with this sideways price movement
- The reluctance for the index to fall after the strong recent rally considers the longer term momentum as remaining with the bulls
- Breakout traders might look to a close above 49420 (being tested currently) to trigger an upside breakout with the initial target favoured at 49964 and a further target projected from the consolidation at 50290
- A close below the low at 48960 is used as the failure level should the breakout trade trigger