Weekly game plan 21 June 2020

We’re not going to spend too much time this week getting into views and opinions, but rather just focus on the signals that a few of the charts we are looking at giving us. So let’s get straight into it.

S&P500

Our view here is little changed from last week, with continuing signs of building bearish / waning bullish momentum on the daily chart. We note that the recent uptrend seems to have broken and has been tested, without the market being able to get above the now resistance it has created. The stochastic oscillator has also generated another sell signal while the MACD sell signal generated a week ago is still in play. The moving average support is still likely to be a key support level that needs to be broken for a new down trend to be established.
In terms of the hourly chart, we note that SPX has been somewhat range bound over the last few trading sessions. Interestingly enough, on Friday the SPX closed down and on the lows and confirmed a break out of the range. On the shorter-term timeframes this is a confirmed short then and could serve as an early entry to another short trade on the daily timeframe. The stop loss would be above the 1 hour range highs.

Gold

Gold is still in the range it has been trading in for the last few weeks. We still favour the probabilities for Gold to break higher out of this consolidation as evidence of bullish momentum continues to build. When looking some individual cold stocks, we note some bullish breaks as well, which some consider as early warnings for moves in the underlying gold price. It will be interesting to see if this theorem holds up. Either way, the bullish trend in Gold has been rather strong and although this current setup has taken a few months to mature (and might still have a few weeks to go?), we feel that it will create a very good trading opportunity when it finally triggers.

Goldfields

GFI appears to have broken a bull flag formation with a target at R207.50. We would be happy to enter into a long trade here at or around (preferably below) R147.00, with a stop loss at R116.59.

Harmony Gold

Interesting break higher here from a rather tight consolidation on HAR. It is complemented with a bullish shift in momentum as well. We are happy to go long around the R58.00 level with a target at R74.28 with a stop loss at R49.66 for a nice 1:2 risk-reward trade.

Clicks

CLS seems to be hanging out around the support zone for some time. We will allow the USDZAR to give us the lead here, but a stronger ZAR could see CLS bounce to the R234.15 area again (which could be a nice short-term trade). In general though, risk off sentiment and a weaker ZAR (which is our base expectation) could finally see that support zone crack. Time will tell.

*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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