SA40 Cash Index Review

The index remains overbought.

  • Those traders using a close below the one day low as trailing stop would now have banked their profits
  •  The projected target  from the previously highlighted range breakout at 52750 has not yet been realised
  • The last four days show the price consolidating in a new narrow range (highlighted blue)
  • The fact that the index keeps correcting in a sideways fashion indicates weak selling pressure and an eagerness for buyers to get back involved, i.e. these small sideways corrections reinforce a bullish bias to the market
  • The index remains overbought but the signal is against the underlying uptrend which we still consider more valid
  • For now we are market neutral but looking for a long re-entry from between levels 52180 and 51928

SA40 CASH INDEX 26 OCTOBER

  1. The blue arrow shows that the upside breakout from the short term range has now occurred and the uptrend is now being continued once again
  2.  The projected target  (52340) from our medium term consolidation  has now been realised
  3. The height of the short term consolidation projected arrives at our next upside target favoured at 52750
  4. Those who have caught the breakout might have difficulty in assessing the best level to utilise as a stop level
  5. The nice follow through in gains today would suggest using today’s opening level as the stop loss level, which in most cases (for those committed) should equate to a risk free trade from here. After today, tightening the stop loss level to a close below the one day low might be a consideration (trailing stop)
  6. For trend followers not yet committed to the long side, a pullback to 51928 is now considered a possible long entry point

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.

Find articles by analysts

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.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.