Article / 07 June 2016 at 9:22 GMT

South Africa Watch: Volume spikes as BHP, RMH lead vanguard

Head of Private Sales / Saxo Capital Markets - South Africa
South Africa
  • Johannesburg Top 40 momentum to the upside
  • BHP Biliton could be in line for potential Rand-205 high
  • RMH momentum crossing into positive territory


Momentum was to the upside on Johannesburg's Top 40 index. Photo: iStock

By Dylan Bester


Momentum up and down shows the previous day's Top40 stock direction and short-term exponential moving averages direction. Advancing and declining stocks in the Top40 shows the amount of stocks for the previous day’s that have closed higher or lower overall.

The overall momentum has moved from being down to up in a week with 10% of stocks changing, while the amount of advancing stocks in the Top40 has started accumulating and 12% more stocks are advancing to the upside.

This shows us that the overall average direction of stocks and momentum is upwards. 

Technical event triggered on BHP Biliton (BHP:xjse)

Source: Saxo Bank

BHP Biliton (BHP:xjse) – Continuation of upward channel.

Momentum: Current price is above the short-term momentum, support price for potential upside move.

Risk: Average true range has dropped to a maximum Rand 7 move against current momentum in one day to the R184 stop out level.

Stochastics: %D still moving lower towards the 20 oversold region, be cautious. %K has crossed over for the upside potential.

Volume: Massive volume spikes shown over the last two trading days as price approaches R175 region.

Chart: Upward trending channel with clear support at R175, intermediate resistance at R200 potential high R205.

Technical perspective on RMB Holdings (RMH:xjse)
Source: Saxo Bank

 RMB Holdings (RMH:xjse) – Momentum crossover to the upside.

• Momentum: Has crossed over at R54, which should support price and provides the potential to move higher.

• Risk: ATR shows R1.50 as the current daily risk on any moves larger and below R54 should concern the upside bias.

• Stochastics: Currently very high and %D at R78 showing that a potential to test R54 level support first is possible.

• Volume: Massive volume spikes pushing from recent support have been on the buy side which does support price.

• Chart: Moved back into Range between R55 and R60 with the potential to move upward toward 60 after testing a recent low R50.38.

Nedbank Ltd (NED:xjse) – Has broken out of the downward channel to the upside. The short-term bias is no longer valid and we could see further upside from here.

Top40 Index (ZA40.I) – Moved higher after the breakout and traded at 48,642 on the CFD contract with the potential resistance not being reached. Currently above support at 47,500 and upside resistance at 48,900 that could be tested with momentum moving higher from last week.

— Edited by Martin O'Rourke

Dylan Bester is a trader on Saxo Bank's South Africa desk.


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