TECHNICAL ANALYSIS - JSE All-share Index at critical resistance | Fin24
 
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TECHNICAL ANALYSIS - JSE All-share Index at critical resistance

Feb 14 2019 17:17
Colin Abrams*

The JSE All-share Index is testing a critical resistance zone right now.

Will it give an important upside breakout, or will it fail from here? The breakout levels to monitor are shown on its chart below.

Recommendation: Buy a breakout or off support.
 
Current trend: Short- and medium-term sideways.
 
Strategy: Buy a breakout above 55 000 (line/s 3), or a reversal up from the 53 200 level.

Chart Setup: The JSE All-share Index has now reached a critical resistance zone at line/s 3 (54 740 to 55 000). The question is where it will break out from here, or not.

Right now, it's formed a short-term broadening formation (blue lines) just below its critical resistance zone. This is potentially a build-up of energy for the important upside breakout.

- Its short-term Stochastic is a relatively oversold zone, so there is potential for more rallying.

Strategy Details: My feeling is the price will move sideways for a while. Nevertheless, a breakout and close above 55 100 (above line/s 3) will be a breakout buy signal for the JSE (my preference is to buy the first minor pullback thereafter).
 
- Or, buy a pullback to short-term support at 53 200. Do whichever happens first.

Target: Between the blue lines of its broadening formation, that is support at 53 200 and resistance (top line 3) at 54 960/55 000. A breakout of the resistance zone will target 56 200 initially (based on the broadening formation); but the main target will be 60 000 (based on the height of its sideways range since October projected up).

Stop-loss: A close below 53 050 for buying off support, and below 54 500 for buying the upside breakout.


tech analysis
(Supplied)

* Colin Abrams is an independent technical analyst. To subscribe to more recommendations by the author, or attend trading courses, 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.

equities  |  jse  |  markets
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