Unum Capital: US Dollar/Rand, JSE Top 40 + Trading Opportunities

Unum Capital: US Dollar/Rand, JSE Top 40 + Trading Opportunities

Dear Trader
This morning we take a brief look at the technicals on the USDZAR, GBPZAR, JSE Top 40, SA 10 Year Bond as well as trading opportunities in Kumba Iron Ore, Vodacom, Mediclinic International Plc and Astral Foods.
#1. USDZAR: Above the R14.50 level, when investor became concerns suggested a blowout to above the 15.00 level, our technical analysis indicators identified the potential for a price decline i.e. a stronger Rand versus the US Dollar. Since then we have seen this come to fruition, with the Rand closing Fridays session at R14.06. At current levels, the ‘money flows’ and technical setup as per the daily chart view suggests that there may be some legs in the ZAR leg of the pair – but only to a limited extent, meaning that a print below 14.00 is possible. When viewed through the eyes of an ultra short term trader (2-3 trading sessions), we see the Momentum Indicator and RSI starting to turn up while the price finds support in the 200-day moving average. 
#2. JSE Top 40 Index (Spot): At current levels, the index is testing the upper boundary of the channel that has been in place since November 2018. While the price action remains strong and the Relative Strength Index is in bullish territory, the Momentum indicator is negatively diverging relative to it’s prior swing highs. The 51730 is currently a resistance level and a pullback below 51430 opens up 50928 as a firsf target, followed by 50506.

#3. Kumba Iron Ore: I was unfortunate to see my recent short/sell recommendation on KIO being taken out by it’s stop-loss. The reality with trading on a short term basis is that one is harldy ever able call the exact top or bottom and that one can only take a high probability opportunity to sell around the top and buy around the bottom. If you haven’t participated, these multi-year high levels may be an opportunity to do so. At above 44000c, both the MACD and RSI signal bear divergence while the price is elevated well above it’s 50-day (37638c) and 200-day moving averages (30825c). Alternatively, traders could look to pair KIO (as a short) versus South 32 (as a long).


S32 / KIO:

#4. Vodacom: The share continues to trade in a sideways to downward channel, offering opportunities to participate on both the long (buy) and short (sell) side. At currently levels, the candle structure and moving averages suggest a move toward the lower boundary of the channel, and an opportunity to take a buy/log position below 10900c, using a stop-loss of 10650c and take profit target of 11400c.


#5. Mediclinic International Plc: Since 21 February, the share has started to consolidate above it’s 50-day moving average. This is a positive development as it suggests as medium term change in trend and an opportunity to participate in an upside share price movement. In addition, the share price has also developed a bull flag formation of which a break up at current levels would see the price make a go at 6800c and potentially the 200-day moving average at 7200c. Entry will be a break above the downward trend line at 6000c, using a stop-loss of 5570c.


#6. Astral Foods: Our last call on ARL (from 14350c on 28/01) saw the share make an immediate advance toward the target of 16000c. Since then, we have seen the share price test year-to-date highs of 17923c which is being followed by a short term consolidation. My next course of action is to monitor whether the price retraces to near the incline support  or at least at around 16500c to 16300c, a level at which trader may want to set as a provisional buy/accumulation zone. Here, the stop-loss would be 15400c with a target of 19000c. Time Frame: Medium Term (2 – 6 months).  


Please chat to the Unum Capital Trading Desk to take advantage of any trading opportunities.
All the best,
Lester Davids
Unum Trading Desk Analyst
Tel: 011 384 2923

Leave a Reply

Your email address will not be published. Required fields are marked *