South African 10-Year Bond Yield
- Lester Davids
- Dec 9
- 7 min read
Research Notes December 2025 > https://www.unum.capital/post/rdec2025
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Highlights: South African 10-Year Bond Yield (Weekly Chart Time Frame)
Mechanical Reversal Confirmed: The momentum profile is signaling a decisive reversal in yield trends. The Ultra Short Term and Short Term indicators are aggressively pivoting upwards from "Neutral" and "Weak" territory, respectively. This confirms that the bearish pressure on yields (falling yields) has been violently arrested.
Trend Stabilization: The structural indicators, Mid Term and Base Term, which were reflecting "Weak" and "High Bearish Momentum" previously, are now also pivoting upwards. This unanimous upward slope across all four tiers confirms the breakdown of the bearish momentum.
Coiled Spring Release: The current action represents the release of the "coiled spring" dynamic to the upside. The market is reversing sharply from the extreme lows, indicating a high-velocity mean-reversion move toward higher yields.
Structural Challenge: While the immediate trend is reversing aggressively, the structural Mid and Base Term indicators are still in the "Weak" or "High Bearish Momentum" tiers. The challenge is now for this strong bounce to drag the structure into the "Neutral" or "Strong" tiers to confirm a sustained uptrend in yields.
Best Action Timeline/Price Action Probability
1 to 10 days: 75% Probability of Aggressive Bounce. The unified sharp upward slope across all indicators guarantees an immediate, aggressive rally in yields toward the 9.00% resistance level.
2 to 4 weeks: 65% Probability of Structural Test. The bounce will test the structural integrity of the previous trend. Expect yields to challenge the 9.00% level, which the structural indicators must clear to move into the "Neutral" zone.
5 to 8 weeks: 60% Probability of Trend Reversal Confirmation. If the Base Term momentum successfully pivots into the "Neutral" zone, the long-term trend will shift to bullish (higher yields), targeting the 9.50% resistance.
🟢 Bullish Scenario: Trend Reversal: The fast momentum successfully clears the 9.00% resistance, pulling the structural Mid and Base Term indicators into the "Neutral" and "Strong" tiers. Yields then target 9.50% and above.
⚪ Base Scenario: Corrective Bounce: Yields reach 9.00% but stall. The structural indicators remain pinned in the "Weak" tier, and price consolidates sideways, failing to confirm the long-term reversal.
🔴 Bearish Scenario: Reversal Failure: The reversal attempt fails prematurely, and the fast indicators hook back down. Yields drop back toward 8.00%, and the structural downtrend resumes.
Momentum Profile (Weekly Focus)
The momentum structure is pivoting aggressively, signaling a strong reversal in yields:
Ultra Short Term: Indication: NEUTRAL | Slope: Sharply Upwards
Short Term: Indication: WEAK | Slope: Sharply Upwards
Mid Term: Indication: HIGH BEARISH MOMENTUM / APPROACHING OVERSOLD | Slope: Upwards
Base Term: Indication: WEAK | Slope: Upwards
Core Thesis The South African 10-Year Bond Yield is undergoing a sharp, mechanical reversal from extreme lows. The unanimous upward slope confirms the immediate trend is higher (bearish for bonds). The strategy is to participate in the expected aggressive bounce and watch for structural confirmation as yields challenge the 9.00% resistance. The structural trend reversal is highly probable but not yet fully confirmed by the Base Term.
Key Actionable Zones
Immediate Resistance: 9.00% (Bounce Target / Structural Rejection Zone).
Critical Structural Support: 8.00% (Psychological Round Number / Inflection Point).
Major Resistance: 9.50% (Extension Target).
Trend Floor: 7.50% (Deep Support).
Trading Notes/Resources (Where Applicable)
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. 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 being held by a trader while the probabilities are based on several factors which may include: short term rating, medium term regime, momentum, horizontal or diagonal support/resistance, candle structure, moving averages and standard deviation, among others. These are short term levels and may be in contrast to medium and long term outlooks which are based on the weekly and monthly charts and, which may be applicable to long term investors. These levels are subject to change based on sentiment, the subsequent price action and company/sector specific or macro news flow. As always, while the levels are outlined, traders should be prepared to adjust in real-time based on the aforementioned.
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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.
TRADING TIP # 1 Let The Candle Confirm
Out of all those available, Candlestick Charts are the most widely used when it comes to analyzing price from a technical perspective. The interpretation thereof helps traders to understand the interaction between market participants and informs who is in control between buyers and sellers. Various types of candle formation convey key information about the range of outcomes for a share for example, following a downward trend, a long lower tail, doji, piercing or bullish engulfing suggests that buyers have started to become active/started to take an interest while following an upward trend, a long upper tail, doji, dark cloud cover or bearish engulfing suggests that sellers have started to become active/started to take an interest. While information is conveyed pre-market, it is the intraday price action that will confirm any trade or opportunity. While we have a plan, we are also ready to switch gears as the price action develops.
TRADING TIP # 2: Failure & Reclaim
FAILURE to hold a prior session high/range high may signal that the upside momentum is slowing and that an opportunity to short/sell may be at hand. This is often reflected via a deteriorating candle structure which suggests that sellers are starting to take control. Examples of such candles are long upper tails, doji's, dark cloud covers, bearish engulfing candles etc. RECLAIMING a prior session low/range may signal that the downside momentum is slowing and that an opportunity to buy may be at hand. This is often reflected via a improving candle structure which suggests that buyers have started to enter and are looking to take control of the price action. Examples of such candles are long lower tails, doji's, piercing candles, bullish engulfing candles etc.
TRADING TIP # 3: Take Note of the 'Igniting Bar'
This is a large green or red candle which suggests that traders should: TAKE NOTE note of the change in characters and potential change of the trend. TAKE NOTE of a potential acceleration of the trend. TAKE NOTE of potentially aggressive buy or selling Often, BIG MOVES start with BIG MOVES.
Core Trading Principles: Short and Medium Term
Trade with the primary trend.
Volume Matters. This represents the interest of large institutional investors who have the ability to move a share, both up and down.
Do not short/sell a share that is above, and in close proximity to it’s rising 8 and 21-day moving averages. This trend can persist for an extended period.
Ultra short term traders, if a share has advanced strongly over a 3-7 day period, book profits. You can always re-enter and do the same trade at lower levels.
If a share is printing a large bullish (green) candlestick following an extended move, use the strength to sell. The likelihood that the share retraces is high.
If a share is printing a large bearish (red) candlestick following an extended move to the downside, use the weakness to start a long position. The likelihood that the share rebounds is high.
Trade in the direction of the 20-day moving average, using the MA as a level to enter as well as a hard break thereof as a trailing stop-loss.
The 8 and 21-day moving averages often act as support and resistance levels. When they are turning down, use them as levels to sell into. The opposite applies when they are turning up.
The first back-test and undercut of the 50/75-day exponential moving average range has a high probability of holding as support or resistance. Buy or sell it for a 1-3 day move to generate cash flow.
Stocks above a rising 200-day moving average spend the majority of their time trending higher. The opposite applies when the 200-day is trending down.
Previous support can turn into resistance and previous resistance can turn to support. Use these zones as levels to trade against.
Support and resistance levels and key moving averages are ranges rather than exact levels. They often overshoot these zones before occasionally reversing at these levels.
Respect the FIB (Fibonacco) retracement zones. They often act as support and resistance levels.
‘PAY-tience Pays’, however be nimble to react to opportunity to cut when a trade hasn’t been working.
Above all, know your time horizon.
Lester Davids
Senior Investment Analyst: Unum Capital
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