- The index has pulled back to the ambush zone of the last leg done and consequently the 50day moving average
- Stochastics in overbought territory
- Bulls may tire here and bears take control.
-- MANAGE YOUR RISK - -
Disclaimer: All ideas are my opinion and should not be taken as financial advice.
It is the first of such a signal since March 2020.
The death cross is a technical chart pattern indicating the potential for a major sell-off.
The death cross appears on a chart when an index’s short-term moving average crosses below its long-term moving average.
Typically, the most common moving averages used in this pattern are the 50-day and 200-day moving...
A price action above 54700 supports a bullish trend direction.
RSI leaves enough room for upside price potential.
Price action in oversold territory.
At its lower range of the linear regression channel pattern - which increases the likelihood of a mean reversion trade.
Also at the lower range of the Bollinger Bands.
Might the 200-day be on the horizon as a target?
After an almost 10% drop in just over a month in this index, I see some people already looking for entry points to go long again, as in long term. There are several technical aspects of great concern to me, pointing to something completely different. Here is a few.
• The red lines indicate that the price has now been in a bearish divergence with several indicators...
The relative strength in selected property names have been of interest to me. You may recall in February we presented the monthly chart for the SA listed property index (J253) as one which could see a recovery (see attached).
(The JSE removed all indices from trading view, including the All Share J203, so I am comparing it to the Top 40 J200).
RDF has been...
So the Top40 broke below the 200 day moving average yesterday and there's the added bearish pattern of a well formed head & shoulders. A continuation of this pattern takes it way down. I repeat, we have 2 Bearish signals.
1. 200 day moving average broken
2. Head & Shoulders
ALSI/J200 held support into the 59000 mark with positive RSI divergence 2 weeks ago,
Right now we it is trading at the upper end of this year long consolidation with a Bull flag breakup happening today
A close above 63000 today confirms the breakout.
Reward to risk 2.5 : 1
In-between the major range that has been running for months we may well be seeing a medium term market top (which many have been calling for with inflation fears and Chinese regulators clamping down) in the making... Are we seeing a crude megaphone pattern forming?
The J200 has been quite lackluster for a while now, it is still rangebound between +/-59000 and +/-63000. 62000 has been capping gains quite aggressively and is a very important level. It remains a sit and wait type of market for now, this coming week or so may well give it some direction.
The monthly chart certainly points to a longer term outlook, but in my view, a serious look at the bigger picture now is absolutely vital.
The JSE TOP 40 (#ALSI) has roughly doubled in value over the past 12 - 15 months or so and will, as I see it, now face an uphill battle to continue in that way. Apart from the fact that it seems that the price chart sits on...