JSE Top 40 Index: Analysis of Weekly Chart/Time Frame

Research Notes November 2025 > https://www.unum.capital/post/rnov2025

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High Five

• Dominant Bullish Structure: The JSE Top 40 remains in a powerful long-term uptrend, with the price recently achieving all-time highs. The longest-term trend indicators are still deeply entrenched in highly bullish territory, confirming the overarching strength of the market.

• Short-Term Cooling: A healthy consolidation is underway. The fastest trend indicators have sharply corrected from "Overbought" levels down into "Neutral" and "Strong" zones, reflecting necessary profit-taking after the recent vertical rally.

• Resilient Base Momentum: Despite the short-term pullback, the Base Term trend remains firmly in the "High Bullish Momentum" tier. This indicates that the core structural demand for SA equities remains intact and has not yet been compromised by recent selling.

• Momentum Divergence: A distinct divergence has formed between the fast, correcting short-term trends and the robust, elevated long-term trends. This suggests the current price action is likely a consolidation pattern within a larger bull market rather than a major reversal.

• Critical Support Hold: The index is currently holding above key psychological breakout levels (near 100,000). Maintaining this floor is essential to keep the immediate bullish breakout structure alive and set the stage for the next leg higher.

The index is currently in a consolidation phase following a relentless rally to new all-time highs. While short-term indicators are cooling off aggressively, the long-term structural momentum remains decisively bullish. Current Price: 102,681

Core Thesis The JSE Top 40 is experiencing a classic bull market consolidation. The aggressive cooling of the Ultra Short Term momentum from extreme highs is a healthy development, allowing the market to digest recent gains. The thesis remains bullish as long as the Base Term momentum indicators sustain their position in the upper bullish tiers. The current pullback is viewed as a potential re-entry opportunity within an ongoing structural uptrend, provided key support near the 100,000 psychological level holds firm.

Comprehensive Summary The J200's momentum profile shows a market transitioning from an unsustainable vertical rally into a sustainable high-level consolidation. The Ultra Short Term trend has rapidly dropped into the NEUTRAL zone, signaling an immediate pause in aggressive buying. However, the Mid Term and Base Term trends remain in the HIGH BULLISH MOMENTUM tier. This alignment signals that while immediate upside may be capped as the market catches its breath, the primary trend is unequivocally upward, and deep pullbacks are likely to find strong institutional support.

Multi-Timeframe Trend Analysis The Ultra Short Term trend is currently NEUTRAL and sloping Downwards, reflecting the immediate cooling of price action from the recent peaks. The Short Term trend is firmly STRONG but sloping Downwards, indicating that while the aggressive buy pressure has eased, sellers have not seized control. The Mid Term trend remains in HIGH BULLISH MOMENTUM, though it is now sloping Downwards, suggesting the intermediate trend is entering a consolidation phase. The Base Term trend is also in HIGH BULLISH MOMENTUM and is actively sloping Gently Downwards, showing minor cooling at the core level but retaining immense structural strength.

Breakouts, Breakdowns, and Reversals (Recent Range Focus) The index has recently broken out to new all-time highs and is now testing the sustainability of this breakout. Bullish Continuation: A weekly close back above the recent established high near 104,500 would signal the end of this brief consolidation and a resumption of the primary uptrend. Bearish Reversal Risk: A sustained break back below the 98,000 breakout level would indicate a "failed breakout" scenario, likely dragging the fast momentum indicators into bearish territory and risking a deeper correction.

Key Actionable Zones The primary focus is on managing the current consolidation. Immediate Resistance is located at the all-time high, approximately 104,800. Psychological Support is strong at the 100,000 round number. Critical Structural Support is found at previous resistance-turned-support near 98,000. A defense of the 100,000 - 98,000 zone is critical to maintaining the highly bullish long-term thesis.

Lester Davids

Senior Investment Analyst: Unum Capital