SteynTrade

JSE:J200 Top 40 Consolidation at Start of February

JSE:J200   TOP 40 INDEX
The JSE has had a good run showing some signs of strength (SoS). After a spring and markup, we tested 60000. Buying interest is lower than November/December which could indicate some consolidation in the short term. This could result in a backup with a set of the breakout level at about 54000. Will watch how this develops.
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Thank you very much for the insight, the new chart and analysis. I am, very short in the market at this stage calling tops way to early so would welcome a breakthrough pullback.

Many thanks, will keep an eye on the short term developments
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Looking at your chart and updated picture with the index moving to 63900. Do you still foresee a potential pullback towards the 54000 mark?
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SteynTrade Stefborr
@Stefborr, See above a new chart to illustrate my view. In short, I still think the JSE is slowing and could be in for a pullback. The JSE has done better than I expected in February. It is outperforming the S&P 500 (see comparative relative strength (CRS) at bottom of the chart) which is hopefully the start of a longer-term uptrend. Previously, due to the higher volume on the pullback that we could see a consolidation. However, it kept going. The last move higher was, however, on lower volume. It is also struggling to get to the top of the upward stride and is forming a wedge pattern. The RSI has divergence also pointing to the slowing. Seems the buyers have lost some interest. Naspers which makes a large part of the Top 40 is also struggling (see my post today). If the current effort is unable to break the highs I would expect a break of the trend channel and a pullback to the breakout levels.
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Thank you.
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