The JSE Top 40 Index has recently pulled back after being in overbought conditions a couple of sessions ago, providing a potential entry opportunity at the key support level of 72,200. This level is significant as it coincides with short-term oversold conditions, making it a zone to monitor closely. Traders should watch the 15-minute and 1-hour charts for signs of changing market sentiment and buyer activity.
Breaking below the 21-day EMA is typically a bearish signal, indicating short-term oversold conditions. However, this could also present a potential recovery at key support levels, particularly around 72,200. With US inflation data on the horizon, there may be renewed buying interest that could drive a rebound. Keep an eye on early signs of a reversal, as this data may spark positive momentum, potentially lifting the Top 40 toward a stronger finish by the end of the week.
Lester Davids, Analyst
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1. The top 40 will not break through its 21-day EMA and will finish lower.
2. It will remain rangebound amid the US inflation and the strengthening rand.
3. The top 40 will have a slight rebound and will close higher on Friday.
Stay tuned and ready to act as opportunities arise. Contact us at tradingdesk@unum.co.za for any further developments.
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