TECHNICAL ANALYSIS: JSE All-Share index – bull market to resume?

A bigger picture look at the JSE All Share index shows it potentially coming to the end of the consolidation phase in a larger bull market. There is a higher target still in place, as shown its chart.

JSE All-Share index – Bull market to resume?

Investment Strategy: Hold

Long-Term Trend: Up

Overall Comment: The index is showing signs of potentially coming out of its five month consolidation. If it can take out last month's high of 58 724 (which it’s not far from) that will be very bullish, and confirm the next leg up to be underway.

• Right now, the fact that the All Share held on to critical support at line/s 2 (55 250-54 700) on closing price basis, is a good sign.

• Its monthly Stochastic is turning up so far, from a relatively oversold level, so the odds strongly favour a new rally to be getting underway. (Note, the index needs to hold up to end-June for the Stochastic to maintain its ‘turn-up’. But given the strength in the US, this is likely to happen).

•  The strategy for investors is to continue holding. There is still a minimum target of 63 000 in place (based on channel 1-2).

•  Stop-loss is a monthly close below both line 1 and line/s 2 (i.e. below 54 200 for June, and 54 600 for July).

•  Overall, we are very likely on the brink of a good rally here.

(Monthly)

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

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