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TECHNICAL ANALYSIS: Fini 15 testing breakout level good news for banks

Jul 24 2018 12:32
Colin Abrams

Having reached its downside target, the JSE Financial 15 index ('fini 15') is on the verge of a potential upside breakout, which will be good news for large-cap financial stocks, especially banks.

JSE Financial 15 Index – Testing breakout level

Recommendation: Buy FINDI stocks

Current Trend: Short-term sideways. Med-term down, but oversold. Long-term sideways.

Strategy: Buy on a breakout above line 3.

(Daily)

Chart Setup: The fini 15 index reached its downside target from a head and shoulders pattern (shown on its line chart when we last showed it). It has rallied from there and is currently moving up through line 2 resistance, and testing line 3 resistance (16 700).

  • Its short-term Stochastic (on top) is not yet overbought and can more higher.

Strategy Details: Buy large-cap financial stocks on a close above line 3 i.e. a close above 16 700 on this index.

Target: Once it closes above line 3, look for a move to 18 200, based on its recent consolidation pattern (which is an inverse head and shoulder-type pattern).

Stop-loss: A close below 15 800 (using this index as a guide for large-cap financial stocks). This index was at 16 640 at the time of writing.

  • Colin Abrams is an independent technical analyst. To subscribe to more recommendations by the author, or attend trading courses, please go to www.themarket.co.za

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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equities  |  jse  |  markets
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