JSE Sector Rotation Report

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

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JSE Sector Strategic Rankings Report as of 09 January 2026 (End of Week Close)

1. Executive Summary: The Verdict

Coal Ignites, Platinum Accelerates, and "Deep Value" Awakens The first full trading week of 2026 has concluded with a dramatic shift in market leadership. Coal Miners have staged a parabolic breakout, moving from a dormant state at year-end to "High Bullish Momentum" in the short term, making it the most aggressive trend currently available.

Platinum Miners have also intensified their ascent. The "Triple Strong" signal from December 31 has evolved into a more aggressive "High Bullish Momentum" reading on the Medium Term timeframe. This confirms the sector is in a powerful acceleration phase, though risks of overheating are rising.

Conversely, the year-end defensive stability in Telecoms persists, but Financials (Banks) failed to launch, remaining stuck in neutral. A surprising development is the awakening of "Deep Value" plays: Chemicals and Hospitals—both structural laggards—have suddenly flashed "Strong" short-term signals, suggesting a rotation into oversold assets is underway.

2. Strategic Asset Allocation View

Suggested portfolio weighting relative to the JSE Top 40 Index based on closing technical posture.

🟢 Overweight (Accumulate / Ride Trend)

• Coal Miners: The new momentum king. Short Term exploded to "High Bullish / Approaching Overbought."

• Platinum Miners: Structural leader accelerating. Medium Term upgraded to "High Bullish."

• Miners (Diversified): Reclaimed "Double Strong" status after a brief wobble.

🟡 Tactical Buy (Speculative / Recovery)

• Chemicals: New Signal. Short Term shifted to "Strong" from "Neutral." A potential dead-cat bounce or deep value reversal.

• Hospitals: New Signal. Short Term shifted to "Strong." Defensive money moving in.

🟡 Neutral (Hold)

• Telecoms: Remains a solid "Strong" defensive hold.

• Consumer Staples: Retains "Strong" Short Term momentum.

• Banks: Unchanged. Stuck in "Triple Neutral."

🔴 Underweight (Avoid)

• Technology: Deteriorating. Short Term remains "Weak" to "Neutral" with no upside impulse.

• Consumer Discretionary: Remains trapped in "High Bearish Momentum" on longer timeframes.

• Paper & Pulp: Still "Oversold" but lacks a trigger.

3. Detailed Sector Analysis by Tier

Tier 1: The Momentum Leaders (Resources)

• Sector: Coal Miners

• Status: Parabolic Breakout

• Technical Profile (09 Jan):

  • Medium Term: Strong

  • Short Term: High Bullish Momentum / Approaching Overbought

• Analysis: A massive shift from Dec 31, where this sector was "Neutral." The surge to "High Bullish" indicates aggressive panic buying.

Tier 2: The Structural Giants

• Sector: Platinum Miners

• Status: Trend Acceleration

• Technical Profile (09 Jan):

  • Medium Term: High Bullish Momentum / Approaching Overbought

  • Short Term: Neutral

• Analysis: The trend has intensified since Dec 31. The Medium Term upgrade to "High Bullish" confirms this is the strongest multi-week trend in the market, though the Short Term "Neutral" suggests a brief pause is currently active.

Tier 3: The "Deep Value" Rotation

• Sectors: Chemicals, Hospitals

• Status: Speculative Rebound

• Technical Profile (09 Jan):

  • Short Term: Strong

• Analysis: Capital is hunting in the bargain bin. Both sectors were "Neutral" or "Weak" at year-end but have suddenly attracted "Strong" short-term inflows.

Tier 4: The Steady State

• Sectors: Banks, Gold Miners

• Status: Consolidation

• Technical Profile: Mostly Neutral.

• Analysis: Gold Miners continue to digest their long-term bull run. Banks remain the definition of average, failing to generate any directional signal.

Lester Davids

Senior Investment Analyst: Unum Capital