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Daily Analysis Top 40

Daily Analysis – SA Top 40

The current #GordhanGupta gate scandal has created a stir in the SA market.

This morning we saw a huge spike in safety stocks like the satrix 40 and Naspers which is weighted heavily on the SA Top 40 index.

If the scandal continues we could see a further purchase of the larger weighted safety stocks causing the Top 40 index to rise.

This being said the SA top 40 has seen a series of lower highs for the past 4 months indicated by the circles on the chart. The descending trend line has been respected in fact it has not even been tested.

I can’t see the major resistance areas being broken and there is a chance of a sell off happening at these zones or at the top channel of the downward trend line. Stochastic RSI is also approaching the overbought mark. MA50 is also looking to cross below the MA200 .We would then see a test of the major support areas at 44,000 and 42,500 in extension.

Currently the sentiment on the Top 40 is bearish but I am neutral due to current fundamental conditions in South Africa. Technically if the resistance zones are respected we could see further downward movement.

*All information in this article is the authors opinion and is for educational purposes only. It does not constitute investment advice or a solicitation to buy or sell any financial instrument. Trading may expose you to risk of loss greater than your deposits and is only suitable for experienced investors who have sufficient financial means to bear such risk.

Stanton Roux

Stanton Roux

Algotrading.co.za is a free online learning platform that merges my two passions software and trading. I like to bring a new twist to trading and show how software can improve your trading skills.