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Relative Sector Positioning: A Summary

  • Writer: Lester Davids
    Lester Davids
  • Jun 9
  • 3 min read

Free Content: June 2026 > https://www.unum.capital/post/rjune2026

Trade Local & Global Financial Markets with Unum Capital.

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


Free Content

Note: When published intraday, JSE equity prices are delayed by 15-minutes.


Summary: Banks remain an absolute pillar of steady relative outperformance this week, maintaining a perfectly uniform Strong (#3) 🟩 footprint across all cycles, while Telecoms and Chemicals continue to hold structural High Bullish Momentum (#2) 🟧 multi-horizon leads against the JSE Top 40. The market's high-velocity expansion block has shifted significantly, with Insurers and Luxury Goods both surging into an Overbought (#1) 🟥 relative profile on the Medium-Term scale, alongside Diversified Miners which remain locked in Overbought (#1) 🟥 positions across their Long- and Medium-Term horizons. Consumer Discretionary, Coal Miners, and Luxury Goods are driving short-term acceleration, pushing their Short-Term horizons into High Bullish Momentum (#2) 🟧. Concurrently, an aggressive board-sweeping wave of shorter-term reversals has triggered, with Technology, Consumer Staples, and Paper & Pulp all rapidly climbing from heavily impaired structural baselines to secure Strong (#3) 🟩 Short-Term outperformance marks. Conversely, the precious metals complex has entered a severe, deep-horizon capitulation phase; Gold Miners have fallen into a High Bearish Momentum (#6) Short-Term slide, while Platinum Miners have completely collapsed into an Oversold (#7) Short-Term footprint.


READY TO TRADE: ACTIONABLE AREAS


For active traders who look to generate cash flow on a continuous basis, determining the ‘next best probability’ level to execute against may be of immense value, specifically by helping to determine the best potential times and levels to commit capital.


The blue and red horizontal lines on the chart represent a next-best-probability buy re-entry range and a next-best-probability sell re-entry range over the short term. The ranges assume no existing position is being held by a trader, while the probabilities are based on several factors, which may include:

  • Short-term ratings and medium-term regimes

  • Momentum indicators

  • Horizontal or diagonal support and resistance

  • Candle structure

  • Moving averages and standard deviation


Please note that these are short-term levels and may contrast with medium- and long-term outlooks, which are based on the weekly and monthly charts and are generally more applicable to long-term investors. These levels are subject to change based on market sentiment, subsequent price action, and company/sector-specific or macroeconomic news flow. As always, while the levels are outlined to guide your capital deployment, traders should be prepared to adjust in real-time based on the aforementioned factors.


THE TACTICAL TRADING GUIDE (PRICE ACTION MODEL): UNCOVER OPPORTUNITIES & ASSESS REWARD-TO-RISK

  • It helps helps clients determine and shed light on the some of the following:

  • The CURRENT TECHNICAL POSITION and a PRICE ACTION PROBABILITY for multiple time frames.

  • Three (3) ‘trading’ time frames are considered: Short Term (1 to 10 days) / Medium Term (2 to 4 weeks) and Long Term (5 to 8 weeks)

  • Whether the reward-to-risk is attractive for a buy/long position

  • Whether a share is weak. In this case, wait until the price stabilizes before looking to enter (i.e. want until it stops going down)

  • Whether aggressive buying is underway. In this case, do not ‘chase’ (do not buy) but instead wait for a pullback to re-enter a buy or an overextension with deteriorating candle structure to sell/short.

  • Whether a trader can look to buy a pullback into a key moving average (continuation trade)

  • Whether a share needs to break a range for a new trend to be determined (bullish or bearish)

  • Whether a traders needs to monitor for a change of character that could lead to a bullish or bearish reversal

  • Whether a share could start a consolidation phase or before continuing it’s bullish or bearish trend

  • Whether the upward momentum is slowing (if it's in a bullish phase)

  • Whether buyers can look to 'phase in' to a position (if it's in a bearish phase)

  • Whether a share lacks directional bias.

  • The data set is available in real-time (on request)

  • The readings are subject to change as the price action develops.


Lester Davids

Senior Investment Analyst: Unum Capital

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