Weekly game plan 4 October 2020

We’re experimenting with something different this week. Let us know what you think!

S&P500 (SPY)

The breakout seems to have lost a bit of steam. Particularly the last three days’ candles are not looking very bullish. Interestingly enough the resistance level that SPY is struggling with, is the previous all-time high level (purple).

Nasdaq (QQQ)

The range we were watching had broken higher, but was re-tested at the end of the week. A break back into the range would see the range lows as a target. A bullish reversal off the (now) support would likely build a case for new all-time highs. Also, is that an inverse head and shoulders? Mixed picture here now, thus no trade signal. Wait for a bounce off the support, or a confirmed break below it before making decisions.

Dow Jones Industrial Average (IYY)

The Dow looks very similar to the S&P500 and the Nasdaq at this stage. Bearish price action (as reflected by the last three candles), but potentially forming an inverse head and shoulders, while failing to confirm a downtrend breakout. Tricky market, stick to your stops.

Brent Crude Oil

The most recent support level broken on Friday. The trend is firmly down over the longer-term and price was rejected by the 200dma. Seasonality could come into play here as well. Overall Oil could be headed lower.

Dollar Index (DXY)

The Dollar Index looks like it’s trying to confirm the trend change. The old resistance level is acting as good support. Watch for a bounce higher (Dollar strength) here. Holding this support level is literally make or break though.

Anheuser Busch Inbev (ANH)

We were looking for this bull flag to play out, but Friday’s close below the swing lows has us worried. It doesn’t look like this bull flag is going to work out. We might see lower prices by the week ahead.

Woolworths Holdings (WHL)

Woolies cleared the 200dma with ease. Our initial target here is R42, but in the longer-term we could see it testing R43 and eventually R47.

Exxaro (EXX)

Very mixed picture here. Candle pattern and formation looking fairly convincing of the short. That said, momentum is looking rather bullish at the moment as well. We’re going to sidestep this trade for now and take our lead from the Dollar Index.

Sasol (SOL)

Tricky call to make here. Oil is getting a little hurt and looking weak with odds being that it trades lower. We know that SOL is not a pure oil company anymore, but oil sentiment still helps drive its share price. On Friday it made a hammer (not the best one in all of history, but still a hammer) candle formation. Notably, the hammer was formed on high volume and on a key support level. That would considered bullish, but the macro picture on oil seems bearish. All we’re saying is keep your eyes open wide here and think with your risk management hat on.

Vodacom (VOD)

Bullish divergence, MACD lining up for a buy signal, the 200dma holding pretty well… a bullish break out of this consolidation could be a good buying opportunity.

Telkom (TKG)

Downtrend broken and re-tested. Price now managed to get above the 200dma. Will we finally see some of our marked levels being tested?

Tiger Brands (TBS)

This setup is playing out well so far. There are a few different ways to see this break, but targets converge around the same area.

Remgro (REM)

We note the key resistance level has been broken. It could be a good long here, back up to the 200dma.

Redefine Properties (RDF)

Downtrend broken while finding support in a larger channel. Risk on sentiment could drive RDF toward the R4.20 level.

FirstRand (FSR)

The R42 level has been significant for some time now. Keep an eye out for a reversal from this level. Above it could be a good trade back up to the 200dma at least.

Brait (BAT)

There is a long fundamental story behind our bullishness on this stock, but for now we’ll just talk about the technicals. R3.64 was a key resistance level that has been broken rather convincingly. BAT looks set to trade to R4.50, at least as a first stop. Potentially great long-term entry here for equity investors.

AVI (AVI)

We’re watching for the 200dma to break and the bid to hold above it before getting too excited.

Aspen Pharmacare (APN)

A small bear flag here to help the stock back to the channel support around R100?

ABSA Group (ABG)

Another bank looking like it’s on the verge of a break out.


*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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