Unum Capital: Research Note - Tiger Brands, US Dollar Index, GUSH ETF, Ethereum 05-Nov-2019

Unum Capital: Research Note - Tiger Brands, US Dollar Index, GUSH ETF, Ethereum 05-Nov-2019

Market Review 
JSE: I It was a stronger Rand, nudged along by the reprieve of not being downgraded as yet, that drove sentiment on the JSE at the started of the trading week. The main driver locally being Moody’s which decided not to downgrade the country’s credit rating to junk status but to downgrade the outlook from ‘Negative’ to ‘Stable’ along with numerous technical adjustments. Also helped along by a global risk-on sentiment, the Rand traded around the 14.73/14.86 range for much of the session, with local names doing much of the driving. On the upside: Discovery (+5.26%), Glencore (+3.29%) and Remgro (+2.48%) while the downside was dominated by Implats (-4.35%), Anglogold Ashanti (-3.15%) and Goldfields (-3.10%). Dis-chem, which reported after the bell on Friday saw it’s share price being knocked back by 9%, while Shoprite ended the session lower by 1.50% after providing the market with an Operational Update for the quarter ending September 2019. Sappi, in an update, also announced the acquisition of Matane mill from the Rayonier Advanced Materials Group.
Europe: European Shares Start Week on Cheery Note: European stock markets closed deep in the green on Monday after Dow Jones hit a  new all-time high, amid upbeat comments from negotiators in the US and  China about a partial trade deal. Autos stocks were among the best  performers after US Commerce Secretary Ross said at Bloomberg TV on  Sunday that tariffs on imported vehicles may not be necessary anymore.  Also, strong earnings report from Ryanair (+8.5%) and Siemens  Healthineers (+9.5%) lifted sentiment. The DAX 30 added 175 points, or  1.4% to 13,136, the highest since June 2018; the FTSE 100 gained 63  points, or 0.9% to 7,365; the CAC 40 rose 62 points, or 1.1% to 5,824,  its highest in 12 years and the FTSE MIB surged 377 points, or 1.6% to  23,311.TradingEconomics.com
United States: – US Stocks Book Fresh Highs
Wall Street closed in the green on Monday with major indexes hitting new  records, as US-China trade deal hopes and weakening recession  expectations nudged mainly energy and technology shares. On Sunday,  Secretary Wilbur Ross said that licenses for companies to sell  components to Huawei Technologies would come “very shortly”. On the  macro side, the global PMI showed that while the manufacturing sector  remains in contraction below the 50-point line, the decline is beginning  to revert. On the corporate side, Saudi Aramco finally launched its  IPO, whereas McDonald’s shares fell after the company fired CEO Steve  Easterbrook. The Dow Jones gained 115 points or 0.4%. The S&P 500  added 11 points or 0.4%. The Nasdaq climbed 47 points or 0.6% – TradingEconomics.com
Asia: Asian equities kicked off Tuesday on the front foot, with most major indices higher for the session, driven by a strong close in the US overnight. The Yuan trades at an 11-week high versus the US Dollar, while the Reserve Bank of Australia held cash rates at a record low of 0.75%.
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Technicals | Tiger Brands (TBS) – While the fundamentals remain constrained by a lackluster local economic backdrop, the technical signals as per the weekly chart suggest that upside is possible. Since the analysis is based on the weekly chart, the idea is one where the time frame is higher, ideal for a medium term trade (preferably equity portfolio). The share has been in a downward trend since peaking in February of 2018. Since then we have seen the trend line resistance holding with each rebound being met with sellers. What is now noticeable is the Relative Strength Index which has started to break out before the price has broken the trend line. This, in my view, is an early bullish technical signal. On the upside, resistance is the 245 to 250 level while downside support is 204 to 207.
 
Technicals | US Dollar Index (DXY)
The index has started to lift off the trend line support, signaling a recovery since declining from the 01 October peak. Post the US market close we saw the Dollar having gained 0.44% to trade at 97.54. The RSI has made a bullish divergence and is starting to turn higher.

Exchange Traded Fund | GUSH Direxion Daily S&P Oil & Gas Exploration & Production Bull 3x Shares
GUSH seeks to deliver 300% of the daily performance of the S&P Oil  & Gas Exploration & Production Select Industry Index.
Trading Levels:
Buy GUSH at $3.42 or better
Stop-loss: $3.10
Take Profit: $4.15
  
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Cryptocurrencies | Ethereum – As per the weekly chart, ETH is looking to breach the upside of the channel in which it has been consolidating since May 2019. The 40-week moving average, which has been in a downward trend since August 2018, has started to stabilize and start to make a small turn to the upside. Note: The 40-week MA is roughly equivalent to the 200-day MA which is used as a tool to determine medium to long term trading trends.

Trading Statistics | Shares – Most To Least Volatile for 04 November 2019 (Click To Enlarge)

Trading Statistics | Volume as a % of 10-day average (Top)

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Trading Statistics | Volume as a % of 10-day average (Bottom)

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Please chat to the Unum Capital Trading Desk to take advantage of any trading opportunities.
All the best,
Lester Davids
Unum Capital Trading Desk Analyst
e-mail: clientservices@unum.co.za
Tel: 011 384 2923

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