South Africa 40 Cash Index Upward Momentum Resumes
SA40 Cash Index (Daily Chart)
The SA40 Cash Index has now confirmed the trend line breakout we were waiting for in the last note (below), to trigger the long entry scenario. The breakout suggests the upward trend is now continuing. A pullback to 51250 could provide a second long entry opportunity, although we are comfortable with an entry at current levels as well. 53090 is the initial resistance target favoured, a break of which (with a close above) considers a move to the next resistance level at 54790. Should the price instead move to close below the reversal low at 50681 the bullish move suggested would be deemed to have failed.
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SA40 Cash Index (Previous)
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. If the current pullback extends to deep into the previous range (48500 to 5100), the long entry scenario above would become obsolete.
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