TECHNICAL ANALYSIS: JSE All-share index seen breaking below support area | Fin24
 
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TECHNICAL ANALYSIS: JSE All-share index seen breaking below support area

May 23 2019 16:27
Colin Abrams

The JSE All Share index is currently breaking below a very important support area as the US-China trade war creates havoc with world stock markets. If the index doesn't turn back up very soon, it could potentially fall a lot lower.

JSE ALL-SHARE INDEX – Breaking important support   [Signals done on alsi future]

Recommendation:  SELL SHORT RALLIES (WITH CAUTION)

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

Strategy: A minor bounce is shortable; but a reversal week up will be buyable.

Chart Setup:  The index is breaking below an important support zone of line/s 2 (55 150-54 750) at the time of writing. This is a very bearish development.

• Its short-term Stochastic is oversold, and giving a positive divergence (a higher low), which typically warns of a rally to come. But for now, one needs to respect this breakdown in price.

(Daily Chart)

JSE all share chart.

Strategy Details:  Sell short on a minor e.g. one or two day bounce followed by a reversal down. However, if it gives a reversal week up, and closes above line 2 (55 150) that will be bullish, and a buy (long) signal.

Target: Down to line 1 at 53 300 where there is support. If it continues below there, then 51 000 will be the next support level. If however it gives a buy signal (long), the target will be 57 500. Right now the downside is looking more likely.

Stop-loss: For a short signal it’s a closing price above 51 500.

  • 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

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equities  |  jse  |  markets
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