South Africa 40 Cash Index 1st pullback from breakout
SA40 Cash Index (Daily Chart)
The SA40 Cash Index has traded through last week’s 53000 initial target, although did not manage to close above the level to unlock the next move to resistance at 54790. The Index price is instead now pulling back from overbought territory. Relative to the strong move up, the pullback appears to be weak, with the last three days of losses not managing to erase the one day of gains on the 15th of February. This suggests a favourable bullish momentum to the price action on the South Africa 40 Cash index at present. The current pullback is the first pullback since last week’s guided range breakout and a possible a second opportunity for long entry for those trading with the momentum. Those looking for further confirmation before long entry might prefer waiting for a close above the dotted trend line as a suggestion that the current pullback has ended and the uptrend is resuming. In which case the short term high at 53070 becomes the initial target and a close above this level favours a move to the next resistance target of 54790. A close below the reversal low (should the reversal occur) would be used as the failure level for the bullish trade setup considered.
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SA40 Cash Index (Previous)
The South Africa 40 Cash index is now trading above our upside breakout level of 51000. The aggressive move through this level intraday is validation enough for us to consider the breakout confirmed. The short term downtrend has now reversed into a renewed near term uptrend. The initial resistance target favoured from the breakout is 53000. A close above this level considers the recent high at 54790 as the next resistance target. A close below the intraday low at 50900 is used as the failure level for the breakout trade suggestion.
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