Article / 05 July 2016 at 11:49 GMT

South Africa Watch: A sideways glance

Head of Private Sales / Saxo Capital Markets - South Africa
South Africa
  • Declining Top40 shares likely to continue lower
  • Barclays Group trending sideways, momentum still down
  • Top40 channel support at 45,000

South Africa
Hunting for waves: The benchmark South African index is trading in a sideways channel, 
but a renewal of downside momentum appears probable. Photo: iStock 

By Dylan Bester

Let's take a look at market breadth, Barclays Group and the Top40, and some recent technical events:

Momentum 5th July

Momentum up and down shows the previous day's Top40 stock direction and short-term moving averages direction.

Advancing and declining stocks in the Top40 shows the amount of stocks for the previous days that have closed higher or lower overall.

Momentum and declining stocks are in favour of the downside and further weakness.

The overall momentum has favoured the upside over the last week since a large gap lower after the UK referendum vote. The Fibonacci retracement levels from the most recent highs and lows show that a 61.8% retracement has been hit at 46 361, which has held price of the overall index subdued.

Technical event triggered on Barclays Group:
BGA group

Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank 

Barclays Group Africa: Trending sideways, momentum still down

Momentum: Short- and medium-term momentum is currently downward and targeting lows seen during the UK referendum announcement.

Risk: Daily swings have been increasing as volatility and uncertainty is high, a move higher than R144 would mean momentum is fading on the downside.

Stochastics: With weakness and conviction of a solid move down as the indicator is close to 20, a grind lower towards support would be more probable.

Volume: Has been slightly thin over the last week with the lack of direction in the markets.

Chart: Momentum will be held up by support at R138.22, the wider range and support level is R128.83.

A look at the Top40

The overall Top40 index is very mixed at the moment and opportunities can be seen on the short side of the index, while a continuation of the downside momentum appears probable.

Chart: Currently in a wide range between 47,823 and 45,000 with resistance at 46,575 currently the bottom side of the gap and support at 45,000 for the overall sideways channel.

Source: Saxo Bank  

— Edited by Michael McKenna
Dylan Bester is a trader on Saxo Bank's South Africa desk.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail