Senior Analyst, Rand Swiss

Shaun is a senior analyst specialising in derivatives trading and technical analysis across index, commodity, FX, and equity markets. With nearly 20 years of experience in financial markets, Shaun brings deep expertise to his role, presenting research and analysis to Rand Swiss clients. Shaun is a regular commentator on local and global financial markets, contributing to major media outlets including CNBC Africa, Reuters, Moneyweb, and Business Day. He produces daily and weekly market reports focused on technical analysis and trading opportunities in his core markets. As a registered person at the JSE and a Certified Financial Technician (CFTE), Shaun combines formal credentials with practical market expertise.

You can follow Shaun on Twitter at @ShaunMurison_RS for regular market updates and trading insights.

Markets find their footing after a volatile period

This week’s edition of Tech Tuesday finds several key markets stabilising after a period of sharp volatility. The J40 has found support following a short-term correction, currencies are respecting well-defined technical levels, and commodities are attempting to resume broader trends after abrupt pullbacks.

While volatility remains elevated, recent price action suggests that near-term corrections in several assets may be giving way to renewed trend-aligned moves. As ever, the focus remains on clearly defined levels, disciplined risk management, and selective positioning, particularly in an environment where smaller position sizes and patience continue to matter.

Inside this update:

• J40 Cash Index
• ZAR
• Commodities
• JSE Sector Analysis & Trade Setups

J40 Cash Index

The short-term correction has found support off the 107845 level, which finds confluence with trend line support. We are seeing some follow through in trade today validating the bullish intraday price reversal from yesterday. The reversal is further supported by a move out of oversold territory.

113870 provides the initial upside resistance target, a close above this level would suggest 117661 as a further upside target from the move.

Traders might consider using a tight stop loss on a move below the 111115 level. In the current high volatility environment smaller positions go a long way as well.

Our index remains highly correlated with metal prices, and continuing to keep an eye on movements in gold is a worthwhile exercise.

ZAR

USD/ZAR

The USD/ZAR conformed to our levels last week, trading to the 15.83 target before rebounding and finding resistance at our 16.30 level.

Provided that 16.30 remains (unbroken) resistance, the downside remains favoured, with 15.83 and 15.63 levels providing the support targets.

Commodities

Gold

Gold rallied just short of the ‘long term’ target at 5611, before undergoing a sharp correction. The correction reached a confluence of both trendline and horizontal support before undergoing a sharp rebound.

We currently view the long-term trend as remaining up and the near-term correction thereof to have ended. The longer-term upside target remains at 5611, although we might not move there in a straight line like before. Traders who are long might consider using an initial stop loss at a close below the 4739 level, then look to trail the stop to a close below a one day low thereafter (should gains ensue).

Brent Crude Oil

Last week’s bearish price reversal off range resistance failed with the price instead breaking above the 66.92 level. We have now seen the first pullback from the new short term high.

We are looking for a positive close on today’s candle before targeting a move back towards resistance at 69.60. Should this scenario manifest, traders might consider using a close below the 65.83 level as a stop loss consideration.

Financials

Investec

The share price of Investec has been grinding higher and is heading towards range resistance. In so doing, the price has moved into overbought territory and started to form a bearish divergence with the stochastic indicator.

Currently we have a bearish intraday price reversal forming. Should the price close closer to the low of the day than the high of the day the reversal is confirmed. In this scenario, a move towards 128.54 is favoured, while a close above resistance at 135.14 or 136.43 (depending on risk tolerance) could be used as a stop loss indication.

Should a price reversal not confirm and the price instead continue to grind beyond the 135.15 level, no trade would be considered.

Resources

African Rainbow Minerals

Yesterday’s intraday price reversal and today’s gap higher suggests that the short term correction of the longer term uptrend is over. Gap resistance at 256.96 provides the initial upside resistance target, while a close below 224.67 would suggest the setup to have failed.

There is heightened volatility in the resource space at present so smaller position sizes and extra caution is advised.

Harmony Gold

Yesterday’s intraday price reversal and today’s move higher suggests that the short-term correction of the longer-term uptrend may be over. Gap resistance at 386.56 provides the initial upside resistance target, while a close below 316.86 would suggest the setup to have failed.

There is heightened volatility in the resource space at present so smaller position sizes and extra caution is advised.

DRDGold

Yesterday’s intraday price reversal and today’s move higher suggests that the short-term correction of the longer-term uptrend is over. Resistance at 58.47 provides the initial upside resistance target, while a close below 44.80 would suggest the setup to have failed.

There is heightened volatility in the resource space at present so smaller position sizes and extra caution is advised.

Industrials

Aspen

The share price of Aspen has produced its first pullback from its recent high. The pullback has returned the price back into oversold territory.

It appears that we had a false break of gap support at 108.05 before a sharp price reversal. The reversal is accompanied by a cross out of oversold territory. A move back towards 117.58 is favoured. Should the price instead move to close below the low 104.63, the setup would be deemed to have failed.

Mondi

A price reversal off support accompanied by a move out of oversold territory with a positive (dotted lines) divergence suggest a short-term rebound might be nearby. 196.48 becomes the initial resistance target, while a close below range support at 182.31 might be used as a stop loss consideration.

Retail

Mr Price

The share price of Mr Price remains in a long-term downtrend. In the short term however, we see a consolidation has started to form which resembles an inverse head and shoulders formation. This pattern is not yet complete, and we would need to see a close above the horizontal resistance line on the chart above for the pattern’s validity.

Should we see the pattern complete it could be an early warning signal that the downtrend could be reversing course.

Truworths

The share price of Truworths has formed an inverse head and shoulders reversal pattern, the break above the 58.65 level confirmed it. We have since had a pullback from the breakout. A move back towards 63.82 is favoured while a close below 55.65 might be used as a stop loss consideration.