Technical Research: Top 40, Resources 10, JSE Banks vs All Share, Healthcare vs All Share, Mondi Plc, PSG Group, Sibanye Stillwater, Vodacom Group, Volume Stats [25 May 2020]
Top 40 Cash | J200
The resistance zone (the 200-day SMA and prior support which has become resistance) mentioned during the course of last week held, with a 2000 point pullback on the index in the two subsequent trading sessions. New short term support is in the range of 45000 however, following the 44% move off the March lows, a larger pullback can be expected. Since the last review (Wednesday pre-market), the RSI has shifted from a reading of 62, to Friday’s close of 53.29 – confirming the weakness. Traders should monitor the short term upward channel for a breakdown to signify a further change in trend.
JSE Resources | J210
The massive rebound has seen the index trade into the outside of the channel formation, which is close to the overhead resistance going back to July 2008 and August 2014. This can be seen on the monthly chart. At Friday’s close, the weekly chart sees a candle structure that suggest profit-taking following the strong rebound. Whilst we not move lower aggressively, we may expect some form of technical consolidation at the prior multi-year support.
JSE Banks vs JSE All Share Monthly Chart
Seems to be “some” level of interest at the lows, from which we saw a bounce on Thursday and Friday. On a shorter time frame – towards the end of the last week – we saw the banks outperform the All Share.
JSE Healthcare vs JSE All Share Monthly Chart
Relative to the All Share, Healthcare has consolidated in a sideways trading range however traders may want to monitor the technical structure which comes in the form of a bull flag setup. If triggered, it may see sector outperforming the broader market on relative basis.
Share remains range-bound, as has been the case for the past 18 months. Resistance: 33500c, with support at 28000c. The longer term technical indicator point to weakness with the RSI (lower panel) drifting below the 50 level. Price need break above 33500c to see a new leg of momentum kick in however a break below 28000c opens up 25500c.
The 17050c swing high we highlighted at the top of last week held with the price pulling back by 8% on Friday. On the long side, traders (ultra short term) should keep their eye on 14415-14500c.
Optimal buying zone just below the 3000c level. Price may target downside ‘gap’ then aim for swing low and 200-day moving average.
The share has been in a gradual upward trend, with higher lows pushing the share to a six-month high. While the trend has been up, momentum may be slowing with: (1) a rising developing, (2) the price at the prioe swing highs and (3) the RSI starting to roll over with a pending break of the incline. With the share, I am considering action from both the long and short side. BUY/LONG Scenario: The 12135-12200 zone was prior resistance: on a breakdown of the rising wedge we may see this re-tested followed by a (potential sharp) back-test. SELL/SHORT Scenario: The price may overshoot the rising wedge – resulting in a false breakout followed by a pullback.
Volume Statistics (last vs 10-day average)
Trading Desk Analyst
Unum Capital (Pty) Ltd
An Authorised Financial Services Provider (FSP 564)