SA40 Cash Index

The index continues to move towards the initial upside target.

  • The index has now traded through the first breakout target of 51700
  •  Traders committed to this move, using a close below the 1 day low as an exit signal (as mentioned below, 10 October) would still be in the trade and would consider continuing to use this trailing stop methodology, whilst targeting the further upside target of 52340 9guided last week)
  • The index appears to be in short squeeze territory providing little in the way of a pullback for new long entries as of yet
  • From current, the closest level we would consider looking for a new long entry (should a pullback occur) would be the 51120 level
  • We continue to respect the upward trend and remind traders of the inherent risks of trying to pick tops in markets

SA40 Cash Index 10 October

  1. The Aggressive breakout traders would have been well rewarded as the index continued to move towards the initial upside target projected at 51700
  2. Those traders who are more conservative and were waiting for the first pullback for long entry would not have found long entry as of yet
  3. However, in both scenarios respecting the upward trend (ahead of the overbought signal) as guided, would have kept traders out of trouble
  4. 51700 remains the initial target favoured, while the projection from the previous high break finds a further upside target of 52340
  5. Traders who are committed to the breakout trade might consider moving their stop to below the previous day’s low
  6. Traders who are not already committed would find an unfavourable risk relative to the suggested reward chasing the market now
  7. We would prefer to see a pullback towards the 50425 or blue trend line (currently 49400) and the a bullish candle reversal before finding long entry
  8. The index remains overbought but once again we do not consider this an indication to trade against the uptrend

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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