Weekly game plan 3 May 2020

Once again we focus on pure technical analysis this week by simply focusing on the charts and setups. The overall market is still a very noisy place and thus we feel that simply looking at what that ‘maps’ say is the wiser course of action at this stage.

S&P500

The SPX eventually traded into the resistance zone we were on the lookout for and has started showing more signs of waning bullish momentum. We note the presence of bearish divergence and a trendline break that could trigger a short trade in the coming week.

ALSI

Although exactly similar to the SPX, the ALSI has approached an historic support level which could turn into resistance if a larger scale global pullback takes place. Although there are no real signals here, we will be watching the ALSI for potential short entries in the coming week.

Coronation Fund Managers

We note a potential shift to bearish momentum here, as well as recent significant relative underperformance. Currently there 4 of 6 confirmations for a short trade present on CML.

The Spar Group

We looked at SPP last week and noted an overhead resistance zone. It is starting to look like it will come down in the coming week as bearish momentum builds and the short-term trend is being tested. One signal to go before we would be happy to take a short position here.

Massmart

MSM is a relative underperformer and has strong bearish momentum. We note that close on the lows on Thursday. Our view is that we will get our final confirmation of the short trade within the first few days of the week. Naturally, risk management rules apply, although we would be happy to enter into a short trade here should the final trigger come.

*Please note that these trade ideas form part of a larger weekly plan and the value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market conditions. The risk of loss arising from trading in Contracts for Difference can be substantial. You should carefully consider whether such investments are suitable for you in the light of your circumstances and financial resources.

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