JSE Top 40 Index: Target Reached + Bearish Reversal. See Updated Comment & Chart

Research Notes January 2026 > https://www.unum.capital/post/rjan2026

Trade Local & Global Financial Markets with Unum Capital.

To get started, email tradingdesk@unum.co.za

The index reached the 118,000 to 120,000 target range (high of 119,314 on Thursday).

The weekly candle (as of Friday 30 January at 15h22) reflects exhaustion from extreme overbought levels. Expect some consolidation in the next couple of weeks.

---

Previous Post: Trading JSSE Top 40 Index

Date: Sunday, 25 January 2026

Closing Price: 114,357.71

1D Change: +0.76%

Multi-Frame Action: 🟢 Parabolic (D) 🟢 Breakout (W) 🟢 Vertical (M)

Technical Upside: Blue Sky Breakout. No historical resistance overhead.

Target: 118,000 – 120,000. Momentum Extension.

Momentum Signal: "Lock-Out" Extreme.

Risk / Invalidation: Close below 108,000 (Breakout Zone).

Valuation Basket: Momentum / Resource Rotation

Primary Driver: Aggressive buying in Mining Duals (PGMs, Gold, Diversifieds) & Rand Hedge rotation.

MARKET STRUCTURE & VOLUME VALIDATION Volume Profile: The index is in a hyper-aggressive uptrend, driven principally by a narrowing basket of large-cap Resource stocks. The move is vertical on the Monthly timeframe, indicating a "panic buy" or "lock-out" scenario where under-positioned funds are forced to chase performance.

Liquidity Zones: The 108,000 – 110,000 zone is now the nearest structural support (previous breakout level). The index has cleared psychological resistance at 114,000. A failure to hold 108,000 would signal a failed breakout, but the current velocity suggests buyers are active on even minor intraday dips.

Divergences: None. Price and Momentum are synchronized in an extreme extension. The Monthly RSI hitting 100.00 is a statistical anomaly, confirming that the trend is currently defined by flow mechanics (squeeze/chase) rather than fundamental valuation.

MOMENTUM PROFILE (WEEKLY)

Tactical Momentum: Extreme Overbought. The Weekly RSI is at 95.93. In a bull market, sustained readings above 80 signal a "Lock-Out" where the trend accelerates vertically, preventing entry for those waiting for a pullback.

Fast Weekly: Strong. The Daily chart confirms this with an RSI of 97.92, showing no signs of slowing down.

Structural Trend: Bullish Breakout. The index has broken decisively out of its multi-year structure into price discovery mode.

Primary Trend: Bullish. The long-term trend is firmly established to the upside, fueled by the "Two-Speed" market dynamic where winners are winning exponentially.

CORE THESIS The JSE Top 40 is experiencing a historic momentum event. The "Lock-Out" readings on Monthly (100) and Weekly (95+) timeframes indicate a market driven by extreme liquidity flows into specific sectors (Miners) rather than broad-based participation. While the extension is statistically stretched and warrants caution regarding a "snap-back," the trend remains undeniably vertical. The path of least resistance is higher until a confirmed reversal pattern appears on the Daily chart. Traders should respect the trend but be aware that volatility will expand significantly at these altitudes.

Lester Davids

Senior Investment Analyst: Unum Capital