Unum Capital: Research - JSE Top 40, USDZAR, Brent Crude, SA & HK Macro Data, Richemont, Volume Statistics, RSI Multiple Time Frame Analysis

Unum Capital: Research - JSE Top 40, USDZAR, Brent Crude, SA & HK Macro Data, Richemont, Volume Statistics, RSI Multiple Time Frame Analysis

Market Review 
JSE: I Continued positive sentiment around a US China trade deal, potential lifting of tariffs as well as Rand strength fueled gains in the local exchange on Wednesday. Overall, the All share Index managed to close higher by  0.56% or 318 points while the Top 40 added 0.61% or 310 points. Leading the gains were Old Mutual (+4.19%), Sasol (+3.65%), Discovery (+3.38%) and Shoprite (+3.22 %) while the downside was dominated by the gold miners: Anglogold Ashanti (-7.03%), Goldfields (-5.16%) and Sibanye (-3.00%). On the currency front, the Rand saw it’s best level in 5 days, testing R14.67 to the US Dollar before closing at 14.74 after the US Closing Bell (11:25pm). In economic news, the Standard Bank Purchasing Managers Index came in below expectations (49.4 vs 49.6) while consumer confidence for Q3 came in at -7 versus a forecast of 3. This morning, the Rand trades at 14.74 against the Dollar, 19.00 against the British Pound and 16.33 versus the Euro.
Europe: European stock markets closed slightly higher for a third consecutive session on Tuesday as expectations that US will halt some tariffs on  Chinese imports as part of a phase 1 trade deal outweighed weak earnings  results from companies including Pandora, Telefonica and Siemens  Gamesa. The DAX 30 gained 12 points, or 0.1% to 13,149, its highest  close since May 22nd 2018; the FTSE 100 added 18 points, or 0.3% to over  one-month high of 7,388; the CAC 40 advanced 23 points, or 0.4% to  5,847, the highest close since October 31st 2007; and the FTSE MIB went  up 53 points, or 0.2% to 23,365, its highest close since May 18th 2018.- TradingEconomics.com
United States: US Stocks Close Mixed: Wall  Street was little changed on Tuesday, as investors showed caution over a  possible trade deal between the US and China on reports that the latter  is pushing President Trump to remove more tariffs as part of an initial  agreement. On the corporate side, Shake Shack shares tanked after the  company said it will temporarily shutter locations in 2020 for upgrades.  Meanwhile, Walgreens rallied after a report said it may go private. The  Dow Jones gained 31 points or 0.1% to 27493. In contrast, the S&P  500 lost 4 points or 0.1% to 3075 and the Nasdaq closed flattish at  8435.TradingEconomics.com
Asia: Equities in the region trade in mixed territory as investors await concrete detail regarding trade negotiations.
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Technicals | Indices – JSE Top 40 (Spot)
Yesterday we saw the index retreat from the prior breakdown level seen on 17 September. On the downside, 50353 is a support level should we see a retracement from resistance while on the upside, 51335 may act as a cap for bulls.
 
Technicals | FX | USDZAR – This morning the price is a developing a ‘doji’ formation close to the prior lows and breakout level (a level which we rebounded off during yesterday’s session – 14.67. Bear in mind the gap on the upside at 14.98 as well as the trend line support going back to 19 July – a level where buyers would look to add to long positions.
Technicals | Commodities | Brent Crude Oil – As per the weekly chart, I note the price continuing to trade in an upward channel that developed since January 2016. In order for this consolidation to cease and the bull channel to continue, we would have to see the price breach the downward trend line going back to October 2018. Note the RSI also attempting to enter the bull zone with a 50 reading.
Macro | SA Retail Sales vs SA Consumer Confidence over 5 years
 
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Macro | I Hong Kong Business Confidence versus Retail Sales
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Equity | Richemont – The chart above for HK business confidence and visitor arrivals could be used to tie into the CFR chart below with HK being a large part of the group’s revenue. Technically I am looking at overhead resistance around 124 (or slightly above) as a distrbution zone. If indeed we do test those level, traders could look to take a short/sell opportunity. This is on my watchlist.
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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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Technical Strategy | Multiple Time Frame Relative Strength (RSI) Analysis: The RSI is a key part of the my technical analysis toolkit in that it helps in identifying opportunities for out-performance (on both the long and short side). Below are the readings for the 1-hour, 4-hour, Daily, Weekly and Monthly charts for stocks above the R20bn market cap threshold. If you’re keen to know more about how I interpret this data and how you can use it to your advantage, please click here.

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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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