Looking a bit stretched

Last week we called for new highs and we got them. Now we’re kind of sitting here thinking that is is looking a bit stretched and wondering if the market is not due a bit of a breather.

PS. a short post this week, but some decent looking setups nonetheless.

Offshore trade ideas
S&P 500 (SPY)

So… a new high it is. From here though, it seems that there is no edge to be found for us. Given the VIX context below, we would not be too surprised to see a correction in the coming week.

Looking a bit stretched
S&P 500 Volatility Index (VIX)

Just an observation here, but every time (during the last few months at least) the VIX has been around the 15 to 16 level, we’ve seen a spike higher in the VIX and a few red days on the equities indices. A weekly or monthly call could be a decent trade on the VIX here. Also, this makes us cautious of major equities indices.

Nasdaq (QQQ)

To add to the looking a bit stretched narrative, QQQ has some decent looking bearish divergence.

Looking a bit stretched
Brent Crude Oil

Maybe the time for oil to cool off a little? Momentum is starting to fade, so we might need a fresh catalyst to keep oil pumping.

South African trade ideas
Aspen Pharmacare (APN)

APN looks rather interesting here as it looks like it is setting up for another leg higher. Decent risk-reward on offer on the long trade here.

African Rainbow Minerals (ARI)

We’re talking our book here a little, but this looks like a decent break and retest of the recent down trend. It would be nice to see R252.

Mondi (MNP)

MNP finally playing along and it looks like the time is right to enter this long.

Firstrand (FSR)

FSR is on a key level here. It would be nice to see some confirmation of a change in momentum before entering. Currently there is only 1 of 6 buy signals triggered, so that confirmation is going to be key.

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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Markets change all the time. New fundamental drivers emerge, technical setups mature or fail and our trading plan must adjust in order to keep up with the ever changing environment. Every week we highlight some of the trade ideas that are generated within our client community so that you can stay on top of what we're looking out for and planning to trade at the beginning of each week. 

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