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South Africa 40 Cash Index range trade and dividend consideration

South Africa 40 Cash Index range trade and dividend consideration

Shaun Murison, CFTe, Technical Strategist


SA40 Cash Index (DAILY)

The SA40 Cash Index did not extend the gains we had previously hoped for, but instead continued to retrace back towards the 50681 support level. As in our previous guidance, we still maintain a bullish bias to trades. Those using a close below 50681 as the failure level last week, would stillbe in long positions on the Index, although under pressure. The blue arrows highlight long lower wicks on the candles which have tested the 50681 level of support. This shows a price rejection and reinforces buying support at this level. From current levels we consider a short term range trade opportunity, with the initial upside target considered at 52345. A close above 52345 considers 53090 as the next resistance target favoured. We continue to use a close below 50681 as the failure level for the trade consideration.

Important to note, those trading the SA40 Cash Index will be subject to a dividend adjustment on Tuesday 6 March, which is currently estimated to be around 142 points.

Struggling with your trading? This could be why.

SA40 Cash Index (PREVIOUS)

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.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.