SA40 Cash Index update

The latest update on the SA40 Cash Index

Last week the small head and shoulders pattern (labelled with red L, H & R) warned of short term weakness, although the oversold signal and larger inverse head and shoulders suggested keeping an upside bias to trades. We were awaiting a bullish reversal near horizontal support at 44700 or a break above the red downtrend line and 45730 level to initiate long positions.

Interestingly enough both bullish scenarios were realised. Circled blue we see a bullish harami pattern near the 44700 level, supported by a cross out oversold territory. The black arrow shows the bullish break of both horizontal resistance and the red trend line.  From current levels 46880 become the initial upside target favoured, while a close below the red trend line might be used as the failure level. 

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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.