The budget speech takes place later on today and the recent events in South Africa has created an impression that lacks confidence from investors.
The Eskom debt and maintenance debacle is not going down well with Pravin Gordhan holding his cards close to his chest on plans to get the troubled utility back on its feet and avoid affecting businesses as has happened earlier in 2019. On the political end the DA leader had resigned as did the mayor of Joburg creating more uncertainty in one of the fastest and financially powerful cities in the country.
The unemployment rate is at an 11 year high nearing the 30% mark which reinforces the clear picture of a failing governance plunging into poverty.
Now with some of the fundamental things out in the open I'll dig into the technicals BECAUSE IT WORKS (Sorry fundamentalists!)
The market is currently trading slightly higher after reversing at the previous low around the 14.50xx zone. When I draw a support level here I can see respect to this level when checking back so I am interested to trade off this level - giving the budget speech perfect timing to be a catalyst for the market to move from this level.
I have noted that the daily time frame shows a bearish market HOWEVER there is a bullish engulfing bar completed on the same 14.50xx level. A bullish engulfing bar on support on the daily and 4 hourly time frame? Really? See where I am going with this?
I'd like to see the market structure promote bullish momentum by means of forming higher lows where a pullback can be used for an entry. My heart says buy but my head works on the technicals so for now I wait and see IF a signal comes forth.
Moody's is also to provide their rating on SA and the investment grade seems likely to drop to junk due to all the problems the country and political parties are facing. Well what do ya know.....so many influencing factors. Trading purely on the fundamentals can leave you with a damaged account and a news headline saying "the move was already priced in" - go figure hehe.
Let's see what shakes :)
The Eskom debt and maintenance debacle is not going down well with Pravin Gordhan holding his cards close to his chest on plans to get the troubled utility back on its feet and avoid affecting businesses as has happened earlier in 2019. On the political end the DA leader had resigned as did the mayor of Joburg creating more uncertainty in one of the fastest and financially powerful cities in the country.
The unemployment rate is at an 11 year high nearing the 30% mark which reinforces the clear picture of a failing governance plunging into poverty.
Now with some of the fundamental things out in the open I'll dig into the technicals BECAUSE IT WORKS (Sorry fundamentalists!)
The market is currently trading slightly higher after reversing at the previous low around the 14.50xx zone. When I draw a support level here I can see respect to this level when checking back so I am interested to trade off this level - giving the budget speech perfect timing to be a catalyst for the market to move from this level.
I have noted that the daily time frame shows a bearish market HOWEVER there is a bullish engulfing bar completed on the same 14.50xx level. A bullish engulfing bar on support on the daily and 4 hourly time frame? Really? See where I am going with this?
I'd like to see the market structure promote bullish momentum by means of forming higher lows where a pullback can be used for an entry. My heart says buy but my head works on the technicals so for now I wait and see IF a signal comes forth.
Moody's is also to provide their rating on SA and the investment grade seems likely to drop to junk due to all the problems the country and political parties are facing. Well what do ya know.....so many influencing factors. Trading purely on the fundamentals can leave you with a damaged account and a news headline saying "the move was already priced in" - go figure hehe.
Let's see what shakes :)