TECHNICAL ANALYSIS: JSE All-Share index trading in tight range | Fin24
 
Loading...

TECHNICAL ANALYSIS: JSE All-Share index trading in tight range

Dec 14 2018 13:39
Colin Abrams

The JSE All Share index is currently trading in a tight sideways range in the short-term. This is offering trading opportunities in both directions until we get a breakout of this range, as shown on its chart below.

JSE ALL SHARE INDEX – Range bound

Recommendation: Hold new long/trade the boundaries

Current Trend: Down on all main timeframes, but all oversold.

Strategy: Hold from recent entry in its support zone. Trade between lines 2 and 3, or a breakout.

Chart Setup: The price dropped to its support zone at lines 1 and 2 to buy, as advised last week. This level (line 2 at, 50 033) needs to hold on a closing price basis.

• Its short-term Stochastic (on top) is oversold with a positive divergence, pointing to a rally.

(Daily)

chart

Strategy Details: Hold from its drop into the support zone. Otherwise, trade off the boundaries by shorting a reversal down from line 3 (52 720), and/or going long (buying) a reversal up from lines 1 and 2 (50 700-50 033, respectively). All signals to be executed on the alsi future.

• A close above line 3 (i.e. above 52 750) will be a breakout buy signal.

Target: For now, its range is bound between line 3 (52 720 level), and lines 1 and 2 (50 700-50 033). A close above line 3 i.e. above 52 750 will then target lines 4 at 54 750/55 000 for taking profits. (If it can break out beyond there, that would be extremely bullish).

• To the downside, a decisive close below 49 900 i.e. below line 2, would be extremely bearish, and target 48 000 initially, and potentially 46 100

Stop-loss: A closing price above line 3 for shorts from line 3; or a close below line 2 (50 033) for longs in the support zone. If it closes above 52 750, then use a close below 51 170 as the stop.  

  • 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.

equities  |  jse  |  markets
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Do you think government can solve the Eskom crisis?

Previous results · Suggest a vote

Loading...