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

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

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

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equities  |  jse  |  markets


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