We’ve said a few time in the past that patience is key. The main benefit of being patient when it comes to trading is that we can wait for the really good setups to mature and then take trades in which the odds are firmly skewed in our favour. Some of the stocks we’ve been watching for a long time have finally triggered buy signals.
Offshore trade ideas
S&P 500 (SPY)
Alright, so we wanted new highs and we got new highs. Where to from here? Looking at this chart right now, we actually don’t have a view on the SPY. The last daily candle signals indecisiveness on this instrument, which is sort of how we feel about it right now too. Perhaps it is time to clear this chart of all drawing tools and relook at it with a fresh perspective in the new week? Momentum wise, SPY is still looking strong. Our target is still $420.69. Patience is key.
Philadelphia Semiconductor Index (SOX)
We’ve mentioned before that we consider SOX a bit of a leader to QQQ, so we’re watching carefully for a potential turnaround here. You’ll notice further below that most major U.S. indices are looking rather bullish. Thus, we need to be patient with any thoughts of bearishness and allow the market to direct our actions. That’s a very long way of saying that the range indicated on the SOX chart below could offer a nice against the trend entry. Bullish momentum seems to be fading a little and the market might be gearing up for a bit of a pull back. That said, we will trade a break of this index ETF in any direction. In other words, either a bullish or bearish break from that range is worth trading. Whichever way this index goes, patience is key.
Dow Jones Transportation Average (DTX)
DTX has also gone a little flat over the last week. We also note that here too, momentum is starting to shift towards the bearish side of things. Perhaps it’s time for DTX to test the 50 day moving average again?
Russell 2000 (IWM)
We looked at a badly drawn Head and Shoulders pattern on IWM last week, which would probably take it down to the blue trend line if it does play out. This week though we note that the MACD has generated a buy signal and that price might just have broken out of a pennant formation. For now, this creates a great risk-reward long trade. Stop loss below $215.
A nice clean break to new highs on QQQ. There is only really one trade to do here, which is long with a stop loss under $338.
Brent Crude Oil
Although the last two daily candles are not the most bullish, we do have a clear break of a tertiary down trend, complimented by a full range of buy signals on the momentum oscillators. We are bullish on oil and will use weakness as an opportunity to take long trades. Perhaps one more test of the 50 day moving average before the push to the $69 to $71 region?
A very nice clean break here on Palladium. This bullish break is going to be supportive of PGM stocks.
U.S. Dollar Index (DXY)
DXY is still channel bound. A break from this channel should offer a good trading opportunity, although we need to be a little patient to see which way it wants to go. Those who like risk could probably take a long here with a very tight stop loss with aim set on the upper end of the channel. For the less risky traders, patience is key here. The more responsible way to trade this would be to wait for a confirmed break.
The support failed and the ZAR firmed up. It appears that the down trend (strengthening Rand) is here to stay for some time after all. It is interesting to note though, that the most recent two daily candles forms an harami candlestick formation. Generally, this is a reversal signal. Do we see the USDZAR bounce to test the support level before continuing the down trend? You’re welcome to leave your thoughts in the comments below.
Then, looking at the chart; the bullish break from the triangle shown last week seems to have failed. This opens BTC to the possibility of a pullback to around the $35k region. As crazy and as scary as that sounds, it would not be historically out of the ordinary for BTC. We remain very bullish on BTC for the remainder of 2021 and continue to anticipate considerably higher prices, thus we welcome a pullback and aim to use it as a buying opportunity.
ETH also had a bit of a failed break. Once again, weakness here would be treated as a buying opportunity for us. Just keep in mind that cryptocurrencies are wildly volatile, so it is best to trade it, or buy it, without the use of leverage on a trusted exchange like VALR.com.
Destination moon! We’ll do another dedicated post about cryptocurrencies in the coming weeks. In the meantime, so far our Which cryptocurrency to buy in 2021 post is aging well.
South African trade ideas
JSE Top 40 Index (ALSI)
The ALSI is looking rather bullish here. It’s making higher highs and has a full range of buy signals on the momentum oscillators. The trend is strong with this one.
ABSA Group (ABG)
ABG is still in a nice up trend. The highest probability entry was the break above the 50 day moving average on Thursday, although it would seem that there is still some upside left before it runs into resistance around R136.
AFE has bounced out of the buying zone. The trend is your friend and patience is key. We could be in this trade for a good few weeks.
Anglo American PLC (AGL)
The AGL move as made it up to the previous high. A trailing stop loss from here would be the best way to manage this trade.
Anglo American Platinum (AMS)
Piercing line candlestick formation, along with early signs of a bullish momentum shift with a proper backwind from Palladium. AMS, and other PGM stocks, are looking solid for longs in the week ahead.
AngloGold Ashanti (ANG)
Gold stocks in general are on the hot list for next week. Should ANG get above the 50 day moving average, it should easily break the day moving average as well. We’d like to see ANG break above R350 and make a run for R400.
Anheuser Busch Inbev SA (ANH)
ANH above the 89 day moving average (R980) could make a run for R1100.
Astral Foods (ARL)
ARL has broken above both the short-term and long-term moving averages. The brief pullback after the breakout was ended with a bullish engulfing candle. Stop loss below the swing lows which can be changed to a trailing stop loss once ARL breaches R165. Liquidity is sometimes an issue here though, so trade it small.
BHP Billiton (BHP)
BHP is still lagging behind AGL. Momentum wise, BHP is starting to look better. Once BHP has traded up to R480, we’ll switch to a trailing stop loss. Patience is key though, we need to give this trade the time it needs to work.
BID Corporation (BID)
BID is looking really good. Also a somewhat illiquid stock to trade, but a long here with a stop below R280 could work out well.
Compagnie Financiere Richemont (CFR)
The CFR breakout is off to a great start. A nice clean break and back test. Bullish momentum boxes are also ticked.
We’re still long CPI with our initial target at R1495. A stronger ZAR and general risk-on sentiment should be supportive of this trade.
DRD Gold (DRD)
DRD is looking really good for a long entry above R14.72. Perhaps the BTC shock over the weekend will drive the Gold price higher, which will play into the hands of gold stocks. DRD presents a really high risk-reward long trade here.
DSY is looking really good as well. Momentum starting to fire off buy signals, the range has broken. Once it gets above the moving averages, we think it trades up to R155 (first target). DSY looks like a simple trend following trade here.
EXX broke overhead resistance around R180 for the third time. This time around though, the previous resistance, now support, has been tested twice without failing. This presents a high risk-reward long trade.
Our FSR trade was almost stopped out, but seems to be back on track (and in the money) once more. We note now that the MACD has given a buy signal and a few more green days will likely see the MACD line cross over 0, which will reinforce our bullishness on FSR.
Gold Fields (GFI)
This consolidation above the 50 and 89 day moving averages, paired with our bullish view on Gold itself, makes for a decent long trade on GFI. Initial target is R159, then R170. Should Gold manage to change it overall trend, we could see GFI up at the R250 levels again in a few months.
GLN is showing some bullish divergence and both the MACD and Stochastic oscillators have triggered buy signals. Logn trades from here can have a stop loss below R57.
Growthpoint Properties (GRT)
GRT is holding above the longer-term moving averages rather well. We continue to think that local property stocks are offering value at the moment. Longer-term traders and investors could consider adding GRT to their portfolios at current levels.
Harmony Gold Mining (HAR)
Following the narrative of Gold and gold stocks in general, we like HAR for a long trade with an eye on the R80 level as a potential target.
Impala Platinum (IMP)
IMP will no doubt benefit from the Palladium (breakout) rally. The trend is very strong here. Hard stop loss below the swing low (also the 20 day moving average) which can be set to a trailing stop once in the money by Average True Range x 2.
Pennant price pattern with early signs of a bullish momentum shift. Should the ZAR keep strengthening, local retailers should benefit in general. The trend on MSM is rather strong too, so this could make for an opportune time to get long of the stock. Stop loss below the pennant support.
Nedbank Group (NED)
Patience is key. We waited a long time for this range break on NED and now finally all the boxes are ticked. Our first target is R167, with a three-day-low stop loss.
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 instrument||Brokerage rate||Margin rate||Minimum trade charge|
|JSE listed equities and ETFs||0.30%||100%||R150|
|CFDs on JSE listed equities||0.20%||10% – 25%||R50|
|SAFEX listed index futures (ALSI)||R20||6% – 8%||R20 per contract|
Offshore stockbroking rates
|Trading instrument||Brokerage rate||Margin rate||Minimum trade charge|
|U.S. listed equities and ETFs||USD 1 cents per share||100%||USD 2|
|Canada listed equities and ETFs||CAD 2 cents per share||100%||CAD 2|
|U.K. listed equities and ETFs||GBP 12 + 0.1%||100%||GBP 12|
|Germany listed equities and ETFs||0.20%||100%||EUR 8|
*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.