It’s looking a little bullish

Well, we’re about ready to get some egg on our faces again by saying that the market is starting to look a little more bullish. We’ve tried that not so long ago and got proper whipsaw for our troubles, but once again we’re going to put it out there. The fact of the matter is that there is a ton of fear, and probably two tons of good reasons why the market should be crashing. It’s not though. Thus, we block out the news and fear and FUD, and we look at the charts. And by the looks of things, it’s looking a little bullish.

Bigger picture (offshore trade ideas)
S&P 500 (SPY)

Alrighty, we start with the usual SPY chart. This chart has been giving us some whipsaw of late, but looking at it now it is getting harder and harder to remain bearish. If we completely ignore all the fundamental factors and only look at the chart, we see the probability of a new bull market starting as rather high. This market has made a new higher-high and now two higher-lows. Should the market break below 3750 (or $375 on the SPY ETF – and in doing so make a lower-low) we can comfortably say that the bear is still around and the market is most likely to push a new low beyond the lows of October/November last year. Should the 3750 level hold though and/or we see a move above 4200 (or $420 on the SPY ETF), we can confidently say that a new bull trend has been established. That’s a lot of if’s and maybe’s at this stage, which is indicative of the tumultuous nature of trend changes. Given that right now the market is in a ‘could go any direction’ phase, we are likely not going to make any moves until we have confirmation. That said, we do have two distinct levels that will act as ‘confirmations’. Until one of those levels are breached, we wait and keep evaluating. In the meantime, it’s looking a little bullish.

it's looking a little bullish
Nasdaq (QQQ)

The QQQ’s are a bit easier to read at this stage. We’ve drawn in an important horizontal level around the $312 mark. Should QQQ break and hold above this level, it’s time to get long. No doubt it will put up a fight though, and there is some bearish divergence. The market is on shaky ground to be sure, but a bullish break here would have to be bought (in our view at least).

it's looking a little bullish
Hang Send Index (HSI)

Maybe we’re being a little too optimistic here with our downtrend line and it being broken… but maybe this is exactly the right time to get long. It’s a rather easy trade here with a stop loss below the swing low and a trailing stop that could ride a long, long while if the larger trend really is turning bullish here. Follow the market, even if it doesn’t make sense.

it's looking a little bullish
Brent Crude Oil

We’ve done a weekly chart here, and as is the case with some of the charts above, we’ve removed some of the old annotations and added a few (in this case only one) new ones. Here we’ve highlighted that $70.45 level, which we see as an important horizontal level. It has acted as both resistance and support on a weekly basis over the last two or so years and in our view is currently acting as the last line of defence for the oil bulls. It could be interesting to try get long off this level if it gives another chance, but be warned that if it breaks, it might get messy really fast (which would likely make for an easy $10 to $20 short trade).

Gold

The $2000 level has been holding strong and gold has not managed to get and hold above it. Trends being trends leads us to think that it likely will, given the heightened risk in the overall market. Some money is moving out of the ‘unsafe’ banking sector and into the ‘safety of precious metals’ – and crypto. Can gold break $2000 here? We’re not sure, so we think it’s probably best to sit on your hands until it does.

Bitcoin (BTCUSD)

$28500 is a key level for BTC in our view. It was support about a year ago and is currently acting as rather strong resistance. That said, we won’t beat around the bush here. Bitcoin came about when banks were collapsing… the current environment is very favourable for Bitcoin once more. This is why it exists. It’s going to be interesting.. and it’s looking a little bullish.

it's looking a little bullish
USDZAR

By now you would probably have picked up that we have a slightly more ‘risk on’ outlook. Looking at this USDZAR chart, we can see that the R18 level is key for now. We think that we see some ZAR strength and a move towards R17.58 in the short-term. Our longer-term view and large channel shown on previous posts still looms overhead, but for the next few weeks, we think we see a stronger ZAR.

South African trade ideas
JSE Top 40 Index (ALSI)

Squint your eyes just right and you might see the makings of a potential head and shoulders pattern. It’s too early to tell though. Our downside target stands for now, but and overall push from global equities will likely mean that we don’t get to see those downside targets in the next week or so. For now, we’re staying out of the ALSI.

AngloGold Ashanti (ANG)

It may be wise to take some profit here, at least until gold is holding above $2000. There will always be another chance to get in.

Sibanye-Stillwater (SSW)

The R36 level is holding. The longer it keeps being tested though, the less confident we are in the long trade. Below R36 targets R32. Above R40 targets R52. Patience and stop losses are going to be important here.

Sun International (SUI)

SUI is looking very good. We pointed out this setup some time ago and it is playing out very well indeed. A trailing stop loss is advised.

Thungela Resources (TGA)

Dare we say that TGA is building a decent base here for a long trade? No setup yet, but keep this stock on your watchlist for a potential long entry.

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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.

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