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We are seeing a continuation of the bullish reversal which I alert to on Monday (pre-market), having been informed by the chart's bullish divergence via the Relative Strength Index (RSI) . The move higher has seen the pair clear the 8-day EMA, the 21-day EMA while the declining 50/75-day EMA range is now a potential resistance zone. Lester Davids Analyst: Unum Capital

Yesterday's pre-market reading for the index stated that if the 8-day EMA is breached, then the 21-day EMA is the next best re-accumulation range. We saw selling pressure intraday however, the lows of the day were exactly at the rising 21-day EMA. This is testament to two things: (1) the algos always seem to respect this level (range) and (2) the reading from the Tactical Trading Guide was in line. The index closed at the mid-point of the 8 and 21-day EMA. As per the 7-day RSI, the index trades in a NEUTRAL range. It may also be worth noting that the index has retraced toward the 50-61.8% Fibonacci retracement range, which could seen an overshoot to the downside. Lester Davids Analyst: Unum Capital

Lester Davids Analyst: Unum Capital

Understanding correlation is vital for making informed investment decisions and effective risk management.   Correlation plays a crucial role in assessing how different shares or assets move in relation to each other, providing insights into portfolio diversification, risk management, and potential investment opportunities. Top 40 share correlation and selected markets Download the Excel file here:   The chart illustrates the correlations between various shares over the past 10 days. What is Correlation   “Correlation refers to the statistical relationship between the price movements of two or more shares or assets.”   When two shares have a positive correlation, they tend to move in the same direction, that is, when one share's price increases, the other share's price also typically increases.   On the other hand, a negative correlation indicates that two shares tend to move in opposite directions – when one share's price increases, the other share's price decreases.   Finally, if two shares have a correlation close to zero, it suggests that their price movements are not significantly related.   Measuring Correlation   The most common method of measuring correlation between two shares is by using the Pearson correlation coefficient.   The correlation coefficient ranges from -1 to 1.   r = 1   indicates a perfect positive correlation, where the two shares move in complete harmony. r = -1   indicates a perfect negative correlation, where the two shares move in opposite directions. r ≈ 0   indicates little to no correlation, suggesting that the two shares have independent price movements. The Importance of Correlation in Share Trading   Understanding the correlation between different shares is crucial for several reasons:   ·  Diversification:  Correlation helps traders identify assets that have low or negative correlations with each other. Diversifying a portfolio with assets that are not highly correlated can help reduce overall risk. When some assets decrease in value, others might increase, which can mitigate losses.   ·  Risk Management:  High correlations among shares can increase the overall risk in a portfolio. If all shares in a portfolio are positively correlated, they are more likely to experience simultaneous declines during market downturns. By knowing the correlation between holdings, traders can optimise their portfolios to manage risk more effectively.   ·  Identifying Investment Opportunities:  Traders can use correlation analysis to identify potential investment opportunities. For example, if they notice a positive correlation between two shares, they might consider one as a proxy for the other. If the correlation is negative, they may see a hedging opportunity to protect against price declines.   ·  Sector Analysis:  Correlation analysis can help traders understand the broader movements within specific sectors or industries. For example, in a technology-heavy sector, many shares might be positively correlated, and understanding this can influence investment decisions within that sector. Limitations of using Correlation in Share Trading     While correlation is a valuable tool, it has its limitations:   ·  Changing Market Conditions:  Correlations between shares can change over time due to shifts in market dynamics, economic conditions, or company-specific events. Traders need to monitor correlations regularly and be prepared for them to evolve.   ·  Limited to Linear Relationships:  Correlation measures linear relationships between variables. Some shares may have non-linear relationships, making it important to consider other forms of analysis alongside correlation.   ·  Causation Concerns:  As always, it's essential to remember that correlation does not imply causation. Just because two shares are correlated does not necessarily mean that one share causes the price movement of the other.   Conclusion     In share trading, understanding correlation is a powerful tool; by examining these correlation changes, traders, investors and analysts can better understand the evolving landscape and make more informed decisions, managing risk, and optimising investment portfolios.   By analysing the relationship between different shares, traders can diversify their portfolios effectively, identify hedging opportunities, and navigate changing market conditions more intelligently.   Correlation should always be used in combination with other forms of analysis, and traders must be cautious about drawing causal conclusions solely based on correlation.   With a solid understanding of correlation, traders can navigate the dynamic world of share trading with greater confidence and success.

GFI has rallied sharply off the Tactical trigger, reaching +R278, from R244 last week Monday. The key medium term moving averages (50, 75 and 100-Day EMA) are just ahead and could act as a resistance range. With the strong short term appreciation, reducing into strength may be a prudent move for active traders. Here's what Unum Capital clients had access to: Here's how the setup has subsequently developed: Lester Davids Analyst: Unum Capital

🔒 To trade, or open a new account, contact the Unum Capital Trading Desk: E-Mail: tradingdesk@unum.co.za | Call: 011 384 2923 Lester Davids Analyst: Unum Capital

While the tactical trading guide is no longer available to clients as part of my research notes, my colleagues have had continuous access to the full data set, which is e-mailed daily at 7:30pm. As with any systematic strategy, the question should be: "Did the model provide the right signal and the right time?" In addition, we can also ask: "Was the data an appropriate guide at major turning points?" Let's have a look at ABG Absa. And, as always, all readings are time-stamped as proof. The share peaked last week Wednesday 19 June. Here's what the end of day data told us. SHORT TERM (1 to 10 Trading Days): "Extremely Overbought. Monitor The Lower Time Frames For Early Signs of Weakness For A Pullback To The 8-Day EMA. MEDIUM TERM (2 to 4 Weeks) "Would Not Enter A Buy/Long Here. The Reward-To-Risk Is Unattractive" LONG TERM (5 to 8 Weeks) "The General Trend Is Up, However, Look For Failure To Hold The Prior Session's Highs To Initiate A 1 to 2 week Short/Sell Setup" Absa Group Chart Let's also have a look at CPI Capitec. And, as always, all readings are time-stamped as proof. The share peaked last week Wednesday 19 June. Here's what the end of day data told us. SHORT TERM (1 to 10 Trading Days) "Extremely Overbought. Monitor The Lower Time Frames For Early Signs of Weakness For A Pullback To The 8-Day EMA. MEDIUM TERM (2 to 4 Weeks) "Would Not Enter A Buy/Long Here. The Reward-To-Risk Is Unattractive" LONG TERM (5 to 8 Weeks) "The General Trend Is Up, However, Look For Failure To Hold The Prior Session's Highs To Initiate A 1 to 2 week Short/Sell Setup" Capitec Bank Chart To trade, or open a new account, contact the Unum Capital Trading Desk: E-Mail: tradingdesk@unum.co.za | Call: 011 384 2923 Lester Davids Analyst: Unum Capital

In Progress or Preparing to Buy Into A Re-Test of The Previous Breakout Level What does this strategy entail? The instrument is in a short-term downward trend over several days, having previously broken out of a range. The price may react to company-specific news flow or be sold in overall market weakness. The price then re-tests the previous breakout level, with the price finding support at or around the prior breakout range. The continuation or bullish reversal is confirmed by a strong candle structure that develops in the subsequent session. The strategy is ideal for ultra short-term/active traders looking to capitalize on retracements in a bullish short-term trend. The technical trend rating could also read neutral or high bearish momentum / approaching oversold. The tickers highlighted assume no existing position held by the trader while the setup is confirmed on the preferred candle structure developing during the upcoming session(s). Unum Trade is your Profit Partner, guiding you through each week’s market journey and strategies. To learn more, contact our Trading Desk team at tradingdesk@unum.co.za or call 011 384 2923.

What does this strategy entail? The instrument is in a short-term consolidation range or downward trend, from which a large green candle develops. This suggests that traders should: (2) TAKE NOTE of a potential change of trend and (2) TAKE NOTE of the start of potentially aggressive buying. The tickers highlighted assume no existing position held by the trader while the setup is confirmed on the preferred candle structure developing during the upcoming session(s) i.e. follow-through. Unum Trade is your Profit Partner, guiding you through each week’s market journey and strategies. To learn more, contact our Trading Desk team at tradingdesk@unum.co.za or call 011 384 2923.

What does this strategy entail? The inverted hammer candlestick pattern (or inverse hammer) is a candlestick that appears on a chart when there is pressure from buyers to push an asset's price up. It often appears at the bottom of a downtrend, signalling a potential bullish reversal. The case for further confirmation of the reversal is confirmed by the instrument trading at or near the close of the hammer formation during the following session. Unum Trade is your Profit Partner, guiding you through each week’s market journey and strategies. To learn more, contact our Trading Desk team at tradingdesk@unum.co.za or call 011 384 2923.

What does this strategy entail? The inverted hammer candlestick pattern (or inverse hammer) is a candlestick that appears on a chart when there is pressure from buyers to push an asset's price up. It often appears at the bottom of a downtrend, signalling a potential bullish reversal. The case or further confirmation of the reversal is confirmed by the instrument trading at or near the close of the hammer formation during the following session. Unum Trade is your Profit Partner, guiding you through each week’s market journey and strategies. To learn more, contact our Trading Desk team at tradingdesk@unum.co.za or call 011 384 2923.

In Progress or Preparing to Sell/Reduce What does this strategy entail? The instrument is in a short-term upward trend over several days, having been bought on company-specific news flow or due to overall market or sector strength. The price then trades into and finds resistance at the swing high, with the candle structure showing signs of deterioration (sellers starting to enter). The strategy is ideal for ultra short-term/active traders looking to capitalize on a potential bearish reversal. Note: The technical trend rating could also read: high bullish momentum/approaching overbought. The tickers highlighted assume no existing position held by the trader while the setup is confirmed on the preferred candle structure developing during the upcoming session(s). Unum Trade is your Profit Partner, guiding you through each week’s market journey and strategies. To learn more, contact our Trading Desk team at tradingdesk@unum.co.za or call 011 384 2923.