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Writer's pictureLester Davids

JSE Top 40 Index: Consolidation + Unwind From Overbought Conditions

Wednesday, 02 October 2024

Time Published: 06h15

  • On Friday morning I highlighted the index in overbought conditions, from which we have since seen no advancement. In fact, a slight pullback following a strong multi-day advance has been underway.

  • The trend line resistance slightly higher at the top of the channel remains a possibility (from which we could see a pullback)

  • For now, the index remains supported by the rising 8, 21 EMA.

  • The model reading + the daily chart as of yesterday's close is shown below.



 

Previous Post: Sunday, 29 September 2024

Time Published: 20h19


  • Updated Chart - please refer to my comments in the previous post below.


Daily Chart


Weekly Chart (a clearer view)


 

Friday, 27 September 2024

Time Published: Pre-Market


  • The buy/long re-entry idea off the rising 21-week EMA has resulted in a +6200 point rally

  • All-time high supported by broad-based buying

  • High bullish momentum as per the weekly and monthly charts

  • The short term reward-to-risk on the buy/long side is becoming unappealing i.e. wait for a pullback if you are looking to re-enter a buy/long position.

  • In terms of key price levels, an inflection in the form of resistance is just ahead.

  • As of yesterday's close, here's what the price action data says:



 

Previous Post: Wednesday, 25 September 2024, Pre-Market


The buy re-entry range at the rising 21-week EMA is likely to return close to 4000 points should the positive sentiment from the Chinese government stimulus translate into strong buying. In total the, both the short (1st) and then long side has generated roughly 8000 points over the month. At current levels, the price action/candle structure remains strong, with the current short term rating being high bullish momentum / approaching overbought.



 

Previous Post: Friday, 20 September 2024


REAL-TIME: 12H49

Ticker: J200 or SA40


Short Term Update + Analysis. On Monday 09 September, the rising 21-week exponential moving average was flagged as a buy/long re-entry. The index then traded into this level, which was followed by a bullish V-shaped reversal which reflected strong interest from market participants who have looked to re-accumulate following the previous unwind from a short term overbought range. From 73000, the index advanced to test a short term high of a 76278 on Thursday, which was just below the previous breakout level. The technical trend rating has since shifted from 'high bearish momentum/approaching oversold' to 'strong'.



 

Previous Post (Tuesday 17 September 2024)

REAL-TIME: 15H06

Ticker: J200 or SA40




Previous view, as communicated:



Lester Davids

Analyst: Unum Capital


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