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Johannesburg - The correction on the JSE is now in full swing, with the market losing ground for the third consecutive day on Wednesday morning, but technical analysts say the market has not necessarily lost its upward momentum.
Broking firm Imara SP Reid said in its daily market snapshot some marginal technical selling pressure has materialised, but for the moment there is no evidence of a trend reversal.
By midday on Wednesday the All-share index was another 0.82% lower at 50 474 points, while the Top 40 index lost 0.84% to 45 485 points.
In fact all the major indices lost ground, but the biggest losers were again mining-related stocks with the Resource 10 index 1.61% lower than Tuesday and the gold index losing 3.09% after a strong run the last few days on the back of a firmer gold price.
The financial index lost 0.8% on Wednesday morning while the industrial index was 0.45% weaker by midday.
Imara SP Reid said that the major indices have limited upside, but charts are showing that they have strayed into overbought territory. The report warned that a level below 44 940 is a realistic target for the Top 40-index.
Wednesday’s losses on the JSE followed a similar pattern on Wall Street on Tuesday, where the major indices reversed sharply later in the day indicating that investors are becoming more circumspect after the strong run in share prices lately.
Technical analysis shows that prospects for US stocks are for the first time in six to seven weeks less convincing, Imara SP Reid said.
The weakness in resources can be ascribed to the stronger rand, which seems to have reached a resistance level and traded at R10.59 on Wednesday, but the major double-listed resources stocks were lower in London too, which indicated that investors are also concerned about valuations at current levels.
Possible gains from the resolution of the platinum strike have also been discounted by now.
The big double-listed resources were all lower on Wednesday morning. Among the big diversified mining groups Anglo American [JSE:AGL] was the biggest loser, dropping by 1.99% to R257.95. BHP Billiton [JSE:BIL] moved 0.94% lower to R343.00 and Glencore [JSE:GLN] was 0.73% weaker at R58.57 after stabilising later in the morning.
Sasol [JSE:SOL], which reached a high of R645.10 as recently as June 16, gave up 1.42% to R623.99 and is now about 3.5% lower than nine days ago.
Among the gold shares Anglogold Ashanti [JSE:ANG] lost 2.95% to R175.61, while the volatile Harmony [JSE:HAR] dropped 3.21% to R31.32 after the gold price lost some ground to $1 313 per ounce.
In the platinum sector Anglo American Platinum [JSE:AMS] was 2.41% weaker at R475.26 and Lonmin [JSE:LON] gave up 2.63% to R44.44, as the mines are still facing an uphill battle to get back into full production.
- Fin24
Broking firm Imara SP Reid said in its daily market snapshot some marginal technical selling pressure has materialised, but for the moment there is no evidence of a trend reversal.
By midday on Wednesday the All-share index was another 0.82% lower at 50 474 points, while the Top 40 index lost 0.84% to 45 485 points.
In fact all the major indices lost ground, but the biggest losers were again mining-related stocks with the Resource 10 index 1.61% lower than Tuesday and the gold index losing 3.09% after a strong run the last few days on the back of a firmer gold price.
The financial index lost 0.8% on Wednesday morning while the industrial index was 0.45% weaker by midday.
Imara SP Reid said that the major indices have limited upside, but charts are showing that they have strayed into overbought territory. The report warned that a level below 44 940 is a realistic target for the Top 40-index.
Wednesday’s losses on the JSE followed a similar pattern on Wall Street on Tuesday, where the major indices reversed sharply later in the day indicating that investors are becoming more circumspect after the strong run in share prices lately.
Technical analysis shows that prospects for US stocks are for the first time in six to seven weeks less convincing, Imara SP Reid said.
The weakness in resources can be ascribed to the stronger rand, which seems to have reached a resistance level and traded at R10.59 on Wednesday, but the major double-listed resources stocks were lower in London too, which indicated that investors are also concerned about valuations at current levels.
Possible gains from the resolution of the platinum strike have also been discounted by now.
The big double-listed resources were all lower on Wednesday morning. Among the big diversified mining groups Anglo American [JSE:AGL] was the biggest loser, dropping by 1.99% to R257.95. BHP Billiton [JSE:BIL] moved 0.94% lower to R343.00 and Glencore [JSE:GLN] was 0.73% weaker at R58.57 after stabilising later in the morning.
Sasol [JSE:SOL], which reached a high of R645.10 as recently as June 16, gave up 1.42% to R623.99 and is now about 3.5% lower than nine days ago.
Among the gold shares Anglogold Ashanti [JSE:ANG] lost 2.95% to R175.61, while the volatile Harmony [JSE:HAR] dropped 3.21% to R31.32 after the gold price lost some ground to $1 313 per ounce.
In the platinum sector Anglo American Platinum [JSE:AMS] was 2.41% weaker at R475.26 and Lonmin [JSE:LON] gave up 2.63% to R44.44, as the mines are still facing an uphill battle to get back into full production.
- Fin24
