SA40 update

A downside breakout has occurred and the price has since retested the resistance of the breakout.

SA40 15 08 2017

In our last note we highlighted the candle stick reversals (coloured arrows) which suggested the end of the short term move up.  It was also noted that there was a short term consolidation between levels 49420 and 49965 and that we were looking for either an upside or downside breakout to occur for the next trade setup.

The downside breakout has in fact occurred and the price has since retested the resistance of the breakout. Those traders who are prepared to trade against the longer term uptrend might consider 48260 and 48050 as possible support targets, whilst using a close above 49420 as the failure level. It should be noted that a contrarian trade (against the trend) does carry an elevated risk relative to trading with the underlying trend. 

Traders who prefer trading with the trend (as we do) might prefer to instead wait for the anticipated weakness to playout before looking for long entry once again. 

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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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