ALL-SHARE IN­DEX – to retestt sup­port

Finweek English Edition - - Creating wealth -

Trend: Short term side­ways. Medium and long term up. Strat­egy: Buy JSE in­dex stocks on a retest of re­cent lows. • The re­cent mar­ket cor­rec­tion has taken the JSE all-share in­dex down to test line 1 sup­port of a large ris­ing chan­nel (with line 2). The price is also near its 50-day mov­ing av­er­age, which typ­i­cally pro­vides loose sup­port. • The daily sto­chas­tic os­cil­la­tor (on top) is try­ing to head up again from its over­sold level so any down­turn in prices will be an op­por­tu­nity to buy. • Look for a retest of the re­cent lows at the 25 100 to 24 800 level in the short term. Then buy if/when an up­ward re­ver­sal day oc­curs from there (though with cau­tion ini­tially) for a more sus­tained rally back-up. Place your stop-loss as two con­sec­u­tive daily closes be­low 24 750 based on that chart. Only if that stop loss is trig­gered will it set up a lower tar­get of 23 000 for a larger sell off. Nev­er­the­less, the longterm trend re­mains up.

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