JSE Top 40 Near 103K: Trend Hangs by This Key Channel Test
The JSE Top 40 is stuck at 102,994, struggling to make any headway after its recent failed attempts to break above 104,124.
Quick overview
- The JSE Top 40 is struggling at 102,994, unable to break above 104,124 due to renewed U.S.-China tariff threats.
- Gold prices are rising, benefiting some mining stocks, but the broader index is suffering as capital flows into safe-haven assets.
- Technically, the Top 40 remains within a rising parallel channel, with a potential pullback to around 102,500 before testing higher levels again.
- Investors are advised to watch for bullish signals around 102,500 - 102,700 and set stop losses to manage risk.
The JSE Top 40 is stuck at 102,994, struggling to make any headway after its recent failed attempts to break above 104,124. Meanwhile, gold prices are taking off and sending some of the mining names soaring – but it’s a small consolation for the broader index, which is getting crushed as capital is flowing into safe-haven assets.
All this is coming as a result of the renewed U.S.-China tariff threats, which are sending a chill through global markets and wiping out any gains the JSE had made. The rand, which took a 1.7% hit after the tariff threats came out, is trying to stage a bit of a comeback now that risk appetite is creeping back in – but it’s still going to be a tough road ahead.
JSE Top 40 Channel Structure Points to Whats Coming Next
Technically, the Top 40 is still wedged inside a rising parallel channel that’s been guiding the market since early September. Price recently put in a spinning top right near the top of the channel – those kind of candles often signal that a pullback is coming.
One possible scenario is a drop down to around the midpoint of the channel, which would put price at somewhere around 102,500, before the bulls come back in to test 104,124 again.
Despite all the noise, the Top 40 is still making higher lows which keeps a long term bullish bias firmly in place. The 100-period SMMA is down at 99,065, which is well below the current price – that means there’s some solid support in place. Meanwhile, the RSI is hovering around 50, which suggests that neither the buyers or the sellers are really in control right now.
JSE Top 40 Setup : Buy the Dip When You See a Clear Signal
If you are thinking of getting back into the market here’s a possible approach :
- Keep an eye on the 102,500 – 102,700 area and be ready to jump back in if a hammer or bullish engulfing candle starts to form.
- Set your stop loss below 100,900, just to make sure you don’t blow out the whole trade if price moves against you.
- Your target is around 104,100, but if we get some serious momentum going, we could see price reach as high as 105,250 – 106,450.
Volatility is high at the moment, but the bigger picture remains intact – as long as price stays inside the channel, dips are likely to be buying opportunities. So holders just need to keep an eye on the bigger picture and wait for the right signal before adding to their positions.
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