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Breadth: Interpretation of Market Conditions

  • Writer: Lester Davids
    Lester Davids
  • 1 day ago
  • 2 min read

Research Notes For 02 to 06 June > https://www.unum.capital/post/r0206june

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Interpretation of Market Conditions

This note interprets the market breadth readings for JSE Mid & Large Caps at the close of trading on two Fridays: 23 May 2025 and 30 May 2025.


End of Day: 23 May 2025

  • The majority of the 102 constituents were in a Neutral state (35).

  • A significant number of constituents exhibited Strong momentum (29).

  • There were 6 constituents considered Overbought and 5 showing High Bullish Momentum / Approaching Overbought. These readings might suggest potential selling opportunities in these specific constituents.

  • On the bearish side, 26 constituents were Weak, 1 showed High Bearish Momentum / Approaching Oversold, and 1 was Oversold, potentially indicating a near-term opportunity in this single constituent.


End of Day: 30 May 2025

  • The number of constituents increased slightly to 103.

  • The Neutral category remained the largest, increasing to 37 constituents.

  • The number of Overbought constituents nearly doubled to 11, and those with High Bullish Momentum / Approaching Overbought also increased significantly to 14. This suggests a general shift towards potential selling pressure compared to the previous week.

  • The number of Strong constituents increased slightly to 33.

  • The Weak category saw a substantial decrease to 7 constituents.

  • The High Bearish Momentum / Approaching Oversold category remained low at 1, and there were no constituents in Oversold territory. This suggests fewer immediate near-term buying opportunities based on these readings compared to the previous week.


Summary of Market Shift

Comparing the two periods, there appears to be a move towards more overbought conditions in the JSE Mid & Large Caps. The increase in constituents classified as Overbought and having High Bullish Momentum / Approaching Overbought from 11 to 25 collectively suggests that potential selling opportunities may be more prevalent at the end of 30 May compared to the end of 23 May. Conversely, the decrease in Weak and Oversold readings indicates fewer immediate near-term buying opportunities based on this market breadth data.


Lester Davids

Senior Investment Analyst: Unum Capital


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