Hello and welcome to 2023! We’re in for another interesting and intense year by the looks of things. We’ll get to putting together a full ‘expectations for the year ahead’ post in due course. For now though, we wanted to share some simple bigger picture trade ideas to kick off 2023 and shake off the cobwebs from not only our blog, but also our charting eye. We’ll get into the local market again over the weekend, but for now let’s get started with the larger markets. So, let’s get straight into it and see what the charts have to offer.
Also, just a side note here, we usually do this on a Sunday while markets are closed and today we’re doing it while the market is open, so the charts will include about a half a day’s worth of data (Monday). That shouldn’t make too much of a difference, but it is just something to be aware of.
Alright, let’s go!
Offshore trade ideas (Bigger Picture)
S&P 500 (SPY)
SPY has hit the trendline / resistance once again. From here it’s a pretty high risk-reward trade to the short side. That said, you’d need to keep a tight stop on the short trade as it could rip higher when eventually this downtrend comes to an end (which is an ever-present threat whenever the downtrend is being tested like this). Our bias is short though. The stochastic oscillator is looking ripe for a reversal and the market is at significant resistance. Lastly, the market keeps playing chicken with the Fed… who knows why, but hey, here we are. The way we see it, interest rates stay higher for longer… which means, the pain is not over yet. Let’s see how it unfolds though.
Moscow Exchange (MOEX)
Weekly chart here on MOEX. Looking at this, we’ve probably missed the bottom, but even so it looks like the fortunes of the Russian stock market is about to change. We think that accumulating some MOEX (which is an ETF) in your offshore account is a good idea.
iShares MSCI China ETF (MCHI)
We mentioned MCHI as a buy a few months back and it looks like this chart is finally starting to point up again (weekly chart). Note that it needs to take out $56 in order to print a higher-high and confirm the trend change. That said, it is looking good and fits our idea that Emerging Markets (EM) will outperform Developed Markets (DM) in 2023.
USDZAR
Another long-term view chart here (weekly) on USDZAR. The trend is strong… and it looks like we might be on the precipice of another leg higher (weakness). Good time to buy some USD we’d think.
Brent Crude Oil
Oil seems to be in a channel and trying to break out the top (bullish). No break yet though, so the channel rules supreme until it pops out the top. This is looking like a good long setup to us though.
U.S. Dollar Index (DXY)
We tweeted last week that DXY was on a key level. Now it seems that the level has been broken. In the very short-term we might see a bounce toward and retest of that level, but we have to ask ourselves if this trend of stronger USD has not maybe come to and end? Would love to hear your thoughts on twitter about this one.
Joining HCA trading
Come find out why we ranked as number one for traditional investors in South Africa. 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 |
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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.