Technical trade ideas

This week I am keeping things a little less ‘opinion’ and focusing just on technical trade ideas. Well, trying to keep opinion out of it at least and just following what the chart says. So let’s get into it.

Offshore trade ideas
S&P 500 (SPY)

Last week when I looked at the SPY, I noted a trend line break. Paired with the VIX sell signal generated in the previous weekly game plan, I took a very cautious approach. This view has not changed. Although the SPY went on to make a new high, I still feel that risk is elevated here. For now, there is no setup for me to trade on the SPY either. Therefore I am still in ‘trade half size’ mode as the overall market is feeling very ‘risky’ at the moment.

technical trade ideas
Dow Jones Industrial Average (IYY)

I’ve said it before and I’ll say it again… the good setups take a long time to play out. As far as technical trade ideas go, IYY serves as a good example of that. The $98.50 and $103.00 targets are born of a Fibonacci retracement and projection. The first target of $98.50 has arguably been hit. The second (full) target is at $103.00. I guess we’ll see how it goes this week. Odds are good that markets come storming out the blocks this week, so for now I am not discounting the possibility of the full $103.00 target being hit.

Dow Jones Transportation Average (DTX)

I left the channel on the DTX chart for a few reasons. The DTX has broken out of the bottom of the channel and is now retesting it, and DTX has not made a new high. It is perhaps too early to tell right now, but this could be the making of a decent bearish setup. One to keep an eye on.

DTX vs IYY

According to the the original Dow Theory; when both the transportation average and the industrial average make two or more consecutive lower highs and lower lows, we are in a bear market. This is not the case right now as you could argue that IYY made a new high. That said, it is most definitely worth noting that DTX did not. Again, no real signal just yet, but something to keep watching.

Brent crude oil

Less than 50 cents away from the $60.00 target. I’m going to call this one ‘target reached’. From here, trailing stop losses with an expectation that the up trend continues.

technical trade ideas
Gold

The key support (both horizontal support and the 200 day moving average) has been broken. Things are not looking good for gold right now. Perhaps once we see some more brrr this might catch a bid again. For now, gold is looking pretty weak. Perhaps we’ll see some support at $1775?

Dollar index (DXY)

Both the falling wedge and inverse head and shoulders seem to be playing out. We saw a rout of Dollar weakness on Friday, so the question now is whether or not that continues in the week ahead. For now, the $94 target remains in place, although is the 50 day moving average is broken, we could see the current primary (down) trend continue.

technical trade ideas
USDZAR

Same old USDZAR chart, still no setup. We’ve go to be patient with this one.

Dogecoin (DOGE)

It’s hard to take Dogecoin seriously, although it was hard to take BTC seriously at the beginning too. Either way, this is looking like a fairly strong setup. Should BTC pump this year (which I expect it will), Dogecoin will likely do very well. I like this setup on Dogecoin for a long.

Ethereum (ETH)

The previous all time high has been broken. A pull back to the $1420.00 would be really nice to see for a great long entry. That said, with a (wide) trailing stop and a rationally sized position, this can likely be bought with the intention to hodl.

Bitcoin (BTC)

Buy the BTC break above $42k, but be responsible and take it small. There is a $12k wide stop loss on this setup (below $29.5k). Manage risk first, worry about how cool rocket rides are later.

techincal trade ideas
South African Trade ideas
Top 40 Index (ALSI)

The trend is your friend. It looks like the ALSI should go up to make new highs.

British American Tobacco (BTI)

BTI is still range bound. Perhaps the best game plan here would be to wait for a possible reversal below R500 again?

Harmony Gold Mining (HAR)

Sticking with purely technical trade ideas, HAR is on the last line of defense. A break below R61.40 could be a great short trade with a stop loss above R70.00.

technical trade ideas
Capital & Counties Properties (CCO)

CCO break above significant resistance in the form of both horizontal resistance and the 200 day moving average. The potential for a medium to longer-term trend change is on the cards. Stop loss below the bottom of the recent range.

BHP Billiton (BHP)

Makings of a bull flag on BHP. A break higher here would not only be our of the bull flag, but also off the 50 day moving average. This is also a very high risk-reward setup.

Clicks Group (CLS)

The blue trend line is still holding. Perhaps a trade back up to the resistance at R270.00 with a stop below R240.00?

Gold Fields (GFI)

The mother of all Head and Shoulders patterns? This could drop all the way to R60.00 if Gold comes off, the ZAR strengthens and there is a mild amount of panic among GFI longs. Let’s see how it plays out.

Investec PLC (INP)

INP is lagging the other banks. A break above this resistance line could see it catching up pretty quickly.

Mediclinic (MEI)

Nice little range break. Can MEI catch up to NTC? Blocking out the noise and sticking to purely technical trade ideas… this looks like a long to me.

Reinet Investments (RNI)

RNI is in a range between R262.00 and R290.00. It’s offering a decent risk-reward on the long trade here.

South32 (S32)

Not the world’s best setup, but some fairly clear bearish divergence. Perhaps a break below the 50 day moving average can serve as a nice entry signal for a short trade?

Sanlam (SLM)

SLM has been on my watch list for what feels like an age now. On Thursday the buy signal was finally triggered. I think we see a decent rally here and perhaps even a medium to longer-term trend change.

technical trade ideas
The Foschini Group (TFG)

No set of technical trade ideas will be complete without considering at least one candle formation. TFG is showing what could turn out to be a shooting star.

Truworths (TRU)

TRU is also showing what might turn out to be a shooting star candle formation. Here we see the (potential) shooting star, right under a key (long-term) horizontal resistance level. The retailers have maybe just gone too far too fast.

technical trade ideas
Joining HCA trading

HCA trading offers a number of different trading accounts to suit different types of traders. Our offshore trading accounts allow traders to buy shares, ETFs, CFDs and even fractional shares in the United States for only $2 a trade. Locally, we offer shares, ETFs and CFDs at good rates with robust and reliable trading platforms. All our trading, including CFDs, is done on a Direct Market Access basis and thus our clients are able to interact directly with the real equity market and not have to worry about excessive counterparty or liquidity risk. Our prime broker locally is a big four bank and offshore we make use of one of the largest non-bank prime brokers in the world.

Local stockbroking rates
Trading instrumentBrokerage rateMargin rateMinimum trade charge
JSE listed equities and ETFs0.30%100%R150
CFDs on JSE listed equities0.20%10% – 25%R50
SAFEX listed index futures (ALSI)R206% – 8%R20 per contract
Offshore stockbroking rates
Trading instrumentBrokerage rateMargin rateMinimum trade charge
U.S. listed equities and ETFsUSD 1 cents per share100%USD 2
Canada listed equities and ETFsCAD 2 cents per share100%CAD 2
U.K. listed equities and ETFsGBP 12 + 0.1%100%GBP 12
Germany listed equities and ETFs0.20%100%EUR 8
Forex0.40%100%USD 4

*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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