JSE indices struggle to regain lost ground

Johannesburg - Some share prices on the JSE were trying to recover somewhat on Monday morning after last week’s persistent selling pressure.
 
Some of the blue chip shares - like MTN [JSE:MTN], Sanlam [JSE:SLM], Standard Bank [JSE:SBK] and Sasol [JSE:SOL] - all traded higher on Monday morning after losing considerable ground over the past seven days.
 
These recoveries were however not enough to ensure that the major indices were in the black by midday on Wednesday. Technical analysts said the market will continue to move sideways or deteriorate gradually.
 
The All-share index was at that stage at 52 175 points only 0.02% lower than Friday’s closing, while the Top 40-index was only 0.02% in the black at 46 296 points.
 
These indices opened higher on Monday morning but could not maintain the momentum. At lunchtime however they were still close to Friday’s closing levels.
 
Technical analysts said the major indices are oversold, but there is uncertainty on world markets after Wall Street and the European markets closed lower on Friday afternoon.
 
The major indices on Wall Street are reaching important resistance levels and amid concerns about valuations some circumspection is needed over the next few days, which may also put a damper on the local market.
 
Some of the local indices are also close to support areas which must be held for the market to recover its upward momentum, as the bourse closed lower on Friday for the ninth consecutive day.
 
The technical analysts said in their daily Market Snapshot on Monday morning that the technical picture for the Top 40-index continues to show gradual deterioration, as the index is approaching an important resistance level of 42 600 points.
 
Of the other indices, the Industrial index was 0.18% higher on Monday morning due to the recovery of big shares like Naspers [JSE:NPN], but the index fell on Friday to a level well below its 65-day moving average for the first time in 2015.

A short-term bounce is likely and there were signs of this on Monday morning, but further deterioration is possible with the index approaching 64 800 points. By midday the Industrial index was at 66 325 points.
 
Naspers however was higher on Monday morning, and gained 1.3% to R1 808.18 after dropping to below R1 800 on Friday. MTN, which lost 7.04% over the past seven days due to the negative influence of the fuel shortage in Nigeria on its activities in that important market, traded 1.2% higher at R217.80.
 
The resources sector was higher on Friday, but lost ground again on Monday morning and traded 0.86% lower. Imara SP Reid said the index is still below a descending 65-day moving average, which means decisive upside potential is unlikely in the short term.
 
BHP Billiton [JSE:BIL] lost 0.878% on Monday to trade at R254.87. Anglo American [JSE:AGL] started off well but the run did not last and by midday the share had lost 1.19% to R188.15.
 
The financial sector - and banking shares in particular - are probably the most oversold and due for a technical spike. Some bargain-hunting took place on Monday morning. Sanlam was 0.29% higher at R68.70 after losing 8.68% over the past seven days, and Standard Bank gained 0.88% to R159.49 but is still 5.61% lower for the past week.