To keep things relatively simple, this week we are posting 12 charts we’re watching. It might be a bit of a slow week ahead, although we think that both local and U.S. retail sales numbers will be decent catalysts. In general, trading setups are still relatively scarce. Here are some of our favourite charts for the week ahead though.
Offshore trade ideas
S&P 500 (SPY)
There is no real setup here for now. We are cautious of a possible correction move back to the 50 (then 89) day moving average. That would not be a significant move in terms of the primary trend though. For now, the bullish trend is strong. My two cents… the Fed prints so much, for so long, that eventually when all the Covid-induced supply chain bottlenecks ease up and inflation slows, the world will be so happy that it just keeps pushing the ‘everything bubble’ for another decade. Perhaps that is the complacency that will eventually bring equity markets down..? Time will tell.
Dow Jones Transportation Index (DTX)
Weekly chart.
Is that a bull flag that just triggered a long?
U.S. Dollar Index (DXY)
That $93 level must be made from stone. The high probability (best risk-reward) short-term trade here is now the short trade to $89. Not one that we would rush to put on, at least not until DXY can get back below the 200 day moving average.
USDZAR
So alright, the USDZAR is now above the 200 day moving average. If the DXY (above) can finally get above $93, and this 200 day moving average on the USDZAR can hold, the longer-term trend change looks like it’s on the cards.
South African trade ideas
JSE Top 40 Index (ALSI)
I hate to say it, but bearishness begone! This chart has strictly speaking triggered a long trade. We’ve also seen that global net flows into equity funds ex-US has surpassed flows into US equity funds on a weekly basis for the first time since September last year. Perhaps it’s time for emerging markets to catch a bid?
Shoprite (SHP)
Very nice breakout and retest of this flat top triangle on SHP. Entering now does not offer the absolute optimal entry point, although if you are willing to sit in a trending stock for a few weeks, SHP is likely a good pick.
Anheuser Busch Inbev (ANH)
We’ll probably post a range of updates on this trade in the coming weeks. Back to the top of the range with a stop loss below R875.
Compagnie Financiere Richemont (CFR)
We were trail stopped out of this trade a short while ago although have to say that it is looking like it wants to make another break higher. Perhaps a smaller, more speculative long position this time?
Mediclinic International (MEI)
Over the last year or so MEI has bounced well (top the top of the range) from this support zone. Granted this is no the absolute bottom of the range, but it is a significant horizontal support from which we see a shift in momentum towards bullishness.
MTN (MTN)
Weekly chart here to show some perspective of where this stock once was. We think that over time (as in, over the next few years) we might see MTN back to it’s highs. In the very short-term though, we’ll probably see some consolidation for a few weeks as the stock tries to find a foothold above the R120 level.
The Foschini Group (TFG)
TFG finds itself back at the bottom of the range it has been in for a few months now. Ths presents two trading opportunities. First, the range trade back to the top of the range. Second, an entry point into a longer-term trend following trade. Failure to hold this bottom support though would invalidate this trade idea and have us relooking at a long around the R136 level.
Telkom (TKG)
Our TKG trade from last week has not worked. There is a good chance that the 200 day moving average could be support, although below that, all bets are off.
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 |
| Forex | 0.40% | 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.