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 cautious with slight bullish bias

The Top40 Index has completed a bullish reversal pattern, providing some cautious optimism for the time being.

Gold, oil and the ZAR are sitting in broad, rangebound environments, waiting for their next directional catalyst, providing range trade opportunities for now or potential breakout opportunities for those prepared to wait.

Equity markets are mixed, with some interesting technical setups emerging in the financial and industrial sectors.

Inside this update:

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

J40 Cash Index

The upside break of the 109,232 and 111,512 levels confirmed our inverse head and shoulders reversal pattern (labelled L, H and R).

The pullback which has since manifested provided traders with a second opportunity for long entry into the J40 Cash Index.

114,530 is the initial upside resistance target from the move, while a move below the 109,232 level might be used as a stop loss indication for the trade.

A close above 114,530 would suggest 117,673 as a further target.

The unpredictability of war and its effects on financial markets continues to suggest smaller position sizes and adherence to stop losses to be of utmost importance.

* Traders of the index will note that there is a cash (dividend) adjustment of 219.7 points expected for the index this (Tuesday) afternoon.

ZAR

USD/ZAR

The USD/ZAR broke the 16.75 support level since our last note, with the price trading promptly to and below the 16.42 support target. The 16.29 level has since proven to be a valid level of support now for the currency pair, and as such, we have now added it to the chart above.

We are waiting for a breakout of the current trading zone between levels 16.29 and 16.42.
An upside break of 16.42 would suggest 16.61 as the near-term target. In this scenario, a close below the 16.29 level as a stop loss indication.

A downside break of the 16.29 support level would instead suggest 16.14 to be the near-term support target from the move. In this scenario, a close above the 16.42 level might be used as a stop loss indication.

Commodities

Gold

Gold now looks to have settled into a short-term range between levels 4,648 and 4,819. So, we are now in a range within a range highlighting the lack of directional commitment.

In range bound market environments, technical traders can look to either trade between these levels or wait for a breakout.

Our preference in the current environment is to wait for the breakout of this short-term range before targeting the next level of support or resistance labelled on the chart above.

We will update guidance accordingly once we feel there is a firm commitment to a breakout direction.

Brent Crude Oil

The price of brent crude returned to gap support after being overbought at range resistance.

There was a sharp reversal off support at around 94.00, although the price has since lost a bit of its upward momentum.

The long-term trend for oil is still assumed as up, despite the short-term consolidation in place. As such we continue to prefer looking for long entry on weakness rather than trying to pick tops at this stage.

Financials

Absa

The share price of ABSA has broken out of the short-term consolidation. This suggests that the long-term uptrend may now be resuming. 256.90 and 266.38 become upside resistance targets from the move, while a close below gap support at 242 would suggest the bullish indications to have instead failed.

Capitec

The share price of Capitec has broken out of the short-term consolidation. This suggests that the long-term uptrend may now be resuming. 4,492 and 4,565 become upside resistance targets from the move, while a close below support at 4,177 would suggest the bullish breakout to have failed.

Resources

Industrials

MTN

MTN has produced the upside break out of our triangle consolidation highlighted in our previous note. The breakout suggests the uptrend to be continuing with the high at 213.85 the initial target from the move. Traders who are long might consider using a close below the 196.00 level as a stop loss consideration.

Retail