Can JSE Top 40 Break 100,700? Index Holds Firm at 99,300
JSE Top 40 trades at 99,301, holding above key support at 98,930. Technicals signal a breakout toward 100,700, backed by rand stability and
Quick overview
- The JSE Top 40 opened at 99,301, showing little change but remaining within an upward channel amid cautious optimism.
- Investors are weighing risks as momentum remains positive, with stable interest rates limiting market movements this week.
- Key local data releases are anticipated, including the leading business cycle index and producer price index, which may provide economic insights.
- Technically, the JSE Top 40 is above key moving averages, with immediate support at 98,930 and resistance at 99,590, indicating potential for further gains.
JSE Top 40 opens at 99,301, little changed but within the upward channel. Cautious optimism with selective buying and broader market hesitation on local and global issues.
Momentum is positive but the range bound action shows investors are weighing the risks. Stable interest rates and no major economic events this week have limited the moves. The broader market mirrored this with modest gains across the board and the rand steady against the majors.
Rand and Local Data in Focus
The rand is steady as investors wait for data. Key releases this week are the leading business cycle index, the producer price index and the SARB quarterly bulletin. All should give insight into the economy.
The SARB’s decision to keep the repo rate at 7% shows they are not in a hurry. Nedbank economists expect Q2 data to show improving household finances driven by:
- Higher wage growth
- Lower inflation
- Lower interest rates reducing debt pressure
Producer inflation for August is expected to be 1.5% year-on-year, the same as July. The 2035 benchmark bond yield slipped 3.5 basis points to 9.13% which is supportive for investors.
JSE Technical Outlook: Bulls Guard 98,930
Technically the JSE Top 40 is respecting the channel, above the 50-period SMA at 98,584 and well above the 200-period SMA at 94,873. Price action has made higher lows and the bulls are in control but the small bodies with upper wicks at 99,590 suggest hesitation.
Momentum is positive with the RSI at 61, there is room for more upside. A bullish engulfing candle last week confirmed the buyers but the spinning tops at resistance suggest consolidation before another push higher.
- Immediate support: 98,930 (mid-channel)
- Deeper support: 98,229
- Resistance: 99,590, then 100,113 and 100,700
Trade: A break above 99,590 could go to 100,113 and 100,700. Newbies might wait for a close above resistance before getting in. Alternatively a dip into the 98,200-98,300 zone could be a lower risk entry if reversal signals appear. Until then the channel is still in play.
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