Publications
Partners
Johannesburg - Share prices on the JSE lost further traction on Thursday morning and technical analysts warned that the major indices are now on their way to important resistance levels, which must be held if the market wants to maintain its upward momentum.
With the All-share index back again below the important psychological level of 50 000 points, the analysts at Imara SP Reid now think the market can go down even further.
There is particular concern about the Resources index which is already below an important resistance level at 46 820, with analysts saying additional damage can be done if it cannot hold this level.
By midday on Thursday the All-share index was already 0.86% lower at 49 721 points and the Top 40 index lost 0.96% to 44 096 points. Analysts now think this index can decline again to important resistance levels of 43 600 to 43 800.
The big loser was the Resources 10-index which includes all the major commodity groups, which lost more than 1 100 points or 2.46% to trade at 45 796 - way below the resistance level of 46 820.
With commodity prices still low, and iron ore in particular at new record lows of about $70 per tonne, prospects for resources are very unfavourable, despite shares being exceptionally oversold. There is not only concern about weak demand from China in particular, but overproduction is also a problem in various industries.
Glencore [JSE:GLN] announced this week that it is closing its Australian coal mines for three weeks in December in an effort to curb overproduction, hoping that other producers will do the same.
READ: Glencore Xstrata to shut mine during Christmas
Among the major commodity groups BHP Billiton [JSE:BIL], which is selling vast quantities of iron ore and coal to China, traded at a new 52-week low of R273.83, 3.02% lower than the day before. The previous low was set on October 30. The share price has now lost 24% over the last three months.
Anglo American [JSE:AGL] and African Rainbow Minerals [JSE:ARI] were both more than 3% lower.
Anglo American is now 19.2% softer for the last three months after it lost 3.18% to R222.92. The share price is now fast approaching the 52-week low of R212.20 set in December last year.
African Rainbow Minerals is already at a new 52-week low after losing another 3.02% to trade at R126.07, 32.1% softer than three months ago.
Glencore fared better than the others and lost only 1.23% to R56.07. It is also only 14% lower for the last three months.
The two worst-performing shares on the JSE, iron ore producers Kumba [JSE:KIO] and Assore [JSE:ASR], also reached new 52-week lows on Thursday morning. Kumba traded 2.27% weaker at R245.31, 26.6% lower for the last three months and 37.4% for the last year.
Assore only lost 0.26% on Thursday, but the current level of R182 is now 54.3% lower for the year.
Gold shares improved lately as investors started bargain-hunting, but some profit-taking forced the index 3.43% lower as analysts warned that the fundamentals for gold shares are becoming stretched.
Gold Fields [JSE:GFI] lost 3.32% to R47.77 after its chief executive, Nick Holland, warned that miners' costs are mostly higher than current spot prices. Across the industry, costs are about $1 300 an ounce including debt repayments.
Gold dropped 0.1% to $1 182/oz, bringing the decline since the beginning of 2013 to 29%.
The Industrial index lost 0.58% to trade below the 61 000 level, and analysts said technical data suggest the area around 59 800 points is a realistic target.
Tsogo Sun [JSE:TSH], which was lately at a 52-week high after the company bought back 12% of its share, lost 6.22% to R28.50 after announcing flat results.
Naspers [JSE:NPN], one of the strong movers last week, dropped for the fourth day in a row and lost 1% to R1 435.63.
With the All-share index back again below the important psychological level of 50 000 points, the analysts at Imara SP Reid now think the market can go down even further.
There is particular concern about the Resources index which is already below an important resistance level at 46 820, with analysts saying additional damage can be done if it cannot hold this level.
By midday on Thursday the All-share index was already 0.86% lower at 49 721 points and the Top 40 index lost 0.96% to 44 096 points. Analysts now think this index can decline again to important resistance levels of 43 600 to 43 800.
The big loser was the Resources 10-index which includes all the major commodity groups, which lost more than 1 100 points or 2.46% to trade at 45 796 - way below the resistance level of 46 820.
With commodity prices still low, and iron ore in particular at new record lows of about $70 per tonne, prospects for resources are very unfavourable, despite shares being exceptionally oversold. There is not only concern about weak demand from China in particular, but overproduction is also a problem in various industries.
Glencore [JSE:GLN] announced this week that it is closing its Australian coal mines for three weeks in December in an effort to curb overproduction, hoping that other producers will do the same.
READ: Glencore Xstrata to shut mine during Christmas
Among the major commodity groups BHP Billiton [JSE:BIL], which is selling vast quantities of iron ore and coal to China, traded at a new 52-week low of R273.83, 3.02% lower than the day before. The previous low was set on October 30. The share price has now lost 24% over the last three months.
Anglo American [JSE:AGL] and African Rainbow Minerals [JSE:ARI] were both more than 3% lower.
Anglo American is now 19.2% softer for the last three months after it lost 3.18% to R222.92. The share price is now fast approaching the 52-week low of R212.20 set in December last year.
African Rainbow Minerals is already at a new 52-week low after losing another 3.02% to trade at R126.07, 32.1% softer than three months ago.
Glencore fared better than the others and lost only 1.23% to R56.07. It is also only 14% lower for the last three months.
The two worst-performing shares on the JSE, iron ore producers Kumba [JSE:KIO] and Assore [JSE:ASR], also reached new 52-week lows on Thursday morning. Kumba traded 2.27% weaker at R245.31, 26.6% lower for the last three months and 37.4% for the last year.
Assore only lost 0.26% on Thursday, but the current level of R182 is now 54.3% lower for the year.
Gold shares improved lately as investors started bargain-hunting, but some profit-taking forced the index 3.43% lower as analysts warned that the fundamentals for gold shares are becoming stretched.
Gold Fields [JSE:GFI] lost 3.32% to R47.77 after its chief executive, Nick Holland, warned that miners' costs are mostly higher than current spot prices. Across the industry, costs are about $1 300 an ounce including debt repayments.
Gold dropped 0.1% to $1 182/oz, bringing the decline since the beginning of 2013 to 29%.
The Industrial index lost 0.58% to trade below the 61 000 level, and analysts said technical data suggest the area around 59 800 points is a realistic target.
Tsogo Sun [JSE:TSH], which was lately at a 52-week high after the company bought back 12% of its share, lost 6.22% to R28.50 after announcing flat results.
Naspers [JSE:NPN], one of the strong movers last week, dropped for the fourth day in a row and lost 1% to R1 435.63.
