Well, well, well… the world is once again laughing at bitcoin and I am once again advocating that it is time to buy bitcoin. Sadly, this week I do not have much time to write this as our wonderful power utility has made my life rather challenging this Sunday and it is already well past 9pm, so I encourage you to look through the previous posts I’ve done about bitcoin and crypto’s and have a read. Although I am always open to being wrong and subsequently changing my mind when clear evidence emerges, in general, my views don’t change all that often. Therefore, the way I see it, is that the whole crypto space is in a four-year cycle, and we are now near the lows. In other words, forget the fear and the noise and just buy bitcoin. Not a massive amount of it, remember, only as much as you can afford to lose. Anyway, in the interest of time, let’s get straight into the charts for the week ahead.
Offshore trade ideas (bigger picture)
S&P 500 (SPY)
SPY looks on track to test the trendline. A few more days of upside and it’ll finally be at resistance. Where to from there? We can’t tell just yet. Although, as far as trends go, until the recent high at $430 is taken out, this is in a downtrend. So, selling some around the $410 mark with a stop at $430 could be a great risk-reward trade. Let’s see how it goes.
U.S. Dollar Index (DXY)
DXY move also looking to be nearing completion here. Support is at 103 – 104. Perhaps if it bounces off support and resumes its rally, we will see equites resume the downtrend? That said, let’s see if the support zone can hold first.
Gold
Gold seems fairly range bound. It’s not the world’s best chart and in truth, I can’t see a very clear easy setup here. It is starting to look a little overbought, so maybe those who are currently long could look to unload some if it gets closer to $1800. Who knows though? With all the FUD around crypto’s, and the contagion that will no doubt spring from it, we might see some panic buying in Gold once it gets above $1800. Best to stay ‘reactive’ here and not forecast too much I think.
Brent Crude Oil
No real new comments on Oil this week. It’s sticking to the range and still giving a chance to get long in my view.
USDZAR
Our downside target is now hit. Some are calling it lower to R17.00, which is entirely possible if the DXY keep diving for 103. My view here now is that we need to wait for another setup before making any new moves. The brave can probably long some here off the trendline, just keep it tight and don’t bet the farm.
Bitcoin (BTC)
At $10 000, BTC would have pulled back roughly 85% from the high made in late 2021. I’ve explained before in various historic posts how I believe the four-year cycle works. If that theory is correct, now is literally the best time to buy. No, you’re not going to get the bottom tick, yes it might drop through $15 000, hell, it might even go to zero (highly doubt that)… but if trends do what trends do, and the four-year cycle plays out, complete with total fear, panic, disbelief (all things forecast in previous posts, seriously, go look), then we need to be greedy when others are fearful. Buy Bitcoin. For more detail though, the chart below is a weekly time frame on a logarithmic price axis, with a 126-week moving average.
South African trade ideas
JSE Top 40 Index (ALSI)
Another massive up-day for the ALSI on Friday. Not quite five and a half percent, but a decent three point seven at least. It has now taken out two of the previous highs in a down trend, so the ‘trend change’ alarms are ringing a little. That said, it does look overbought, and the macro risks are not yet gone. I would not be too surprised to see some weakness early next week as the market just cools off a little. In the longer-term though, South Africa is still one of the best Emerging Markets (EM) out there and EM’s are looking a lot more attractive that Developed Markets (DM) at this stage. So maybe the time for bargain hunting on the good ol’ JSE has come?
Anglo American PLC (AGL)
I pointed out AGL a week ago and it has run really very well. “AGL, BHP and GLN will soon be the bells of the ball in our view.” was exactly the line I used in fact. Now, it is time to take some money off the table here (at least if you are a trader – investors can stay put and look to buy more on pullbacks). BHG played along, but GLN did not. GLN does have a nice setup though and we’ll look at that one in a little while.
Aspen Pharmacare (APN)
I’m not the world’s biggest fan of pharmaceutical companies to be honest, but hey, stock markets don’t really care about my feelings now do they. I’ve pointed out the consolidation (what I think is an accumulation) pattern on APN in recent weeks for long-term investors. Here it is again. Still no breakout for the traders but holding strong and putting up all the early signs of a trend change for the longer-term investors. Keep this on the radar.
Glencore (GLN)
GLN holding the support at R102 rather well. I like this stock for a long-term play as well as a short-term long trade. Stop loss below R100, ATRx2 trailing stop or 3-day low as a moving target. Nice high risk-reward here.
Anheuser-Busch Inbev (ANH)
After a few rounds of being beaten by ANH, I am back and once again trying to short this stock. This time from an over-bought position in a resistance zone with a stronger ZAR as a backdrop. Let’s see how it goes this time.
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Joining HCA trading
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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 |
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*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.