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 caught between momentum and mean reversion

Local and global markets are caught in a period of technical indecision, with the J40 index, gold and Brent crude all at inflection points following sharp moves. We await directional confirmation on a number of counters and traders are advised to exercise patience before committing to new positions.

Inside this update:

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

J40 Cash Index

The J40 index has found support at the 105 449 level after an aggressive move lower on Friday last week. Yesterday saw an intraday reversal off the level and from oversold territory.

The reversal from oversold territory suggests renewed gains with 109,232 the initial upside target from the move.

Traders who are long might consider using a close below the 105,449 level as a stop loss consideration.

Today’s price action does lower conviction on the reversal, and those not yet committed might consider waiting for a less uncertain opportunity to present itself.

ZAR

USD/ZAR

The reversal off support at 16.29 highlighted last week did well to predict the move to resistance at 16.75. The move reaffirming the short-term range for the USD/ZAR currency pair.

Yesterday saw an intraday bearish reversal off the 16.75 level, suggesting a move back towards the 16.29 level once again. Traders who are short might consider using a close above 16.75 as a stop loss indication.

Commodities

Gold

The price of gold has found support at the 4,999 level from where it has produced an intraday bullish price reversal from oversold territory. The reversal is in danger of failing as we test the 4,999 level today once again. Should today’s candle manage to close well off current levels and back above the 4,548 level, we would consider the reversal to still have relevance and favour a move back towards 4,644. If the 4,999 level doesn’t hold, 4,402 becomes the next downside support target.

We view gold as being in a range trading environment but have low conviction in yesterday’s bullish price reversal and prefer to wait for the next opportunity to manifest.

Brent Crude Oil

The price of Brent has traded to last week’s resistance target of 112.68, where it is currently finding resistance.

Yesterday’s candle marked a point of indecision, and we have now moved into overbought territory. Traders who were long into the move might consider locking in profits at current levels.

The long-term trend for the commodity remains up, and as such, a long bias remains preferred. We are currently hoping for a pullback from overbought territory before looking for new long positions.

Financials

Resources

Industrials

Aspen

The share price of Aspen has undergone its first pullback from its recent high. The price is now attempting to reverse off support and from oversold territory. We are looking for a positive close on today’s candle, in which case a move towards initial resistance at 144.46 is favoured. Traders who find a long entry might consider using a close below the 132.80 level as a stop loss consideration.

MTN

MTN has undergone its first pullback from a new short-term high. We are looking for a positive close off the 204.64 level before targeting a move back towards 219.55. In this scenario, a close below the 204.64 level could be used as a stop-loss consideration.

Telkom

Telkom is setting up for a possible range trading opportunity. A positive close today would suggest a bullish price reversal off support, in which case a move back towards 60.91 is favoured. Traders who find a long entry into this scenario might consider using a close below the 55.80 level as a stop loss consideration.

Retail