Not all bears get honey. We expected markets to come off last week and pretty much exactly the opposite happened. What is rather odd is how gold rallied fairly well, and naturally so did the gold stocks, but we did not see the selloff in equities that we expected. Perhaps picking tops and bottoms is not so wise after all? This is a lesson that we imagine almost everyone who reads this blog regularly is already familiar with, including ourselves. Although, one that we must relearn from time to time… evidently. Up she goes!
Bigger picture (offshore trade ideas)
S&P 500 (SPY)
The double top we looked at last week has failed and the market went on to push higher. It seems now that SPY wants to trade to that $461 level. We are going to be patient in the sense that we are not going to chace the long trades here, nor are we going to continuously attempt to short. We will wait for another clear setup before we trade again.
Nasdaq (QQQ)
The QQQ chart looked a little better to us last week than the SPY chart did. As mentioned last week, it made a double top right on the resistance level. Well, thank goodness for stop losses because on Wednesday the resistance was blasted through and QQQ kept printing highs. We can debate the candle that formed on Friday (shooting star?), but as is the case above, we’re going to sit back and wait for a new setup before making any moves.
Philadelphia Semiconductor Index (SOX)
SOX still bumbling along the top end of the channel. We’re still of the view that we will see SOX test the lower end of the range, and with bearish engulfing candle printing on Friday, the short trade is looking mighty tempting here. This might be one that we actually take the short on when U.S. markets open on Monday.
U.S. Dollar Index (DXY)
DXY tagged the $99.50 level. Where to from here? We think we see the bounce to $101.30 before eventually breaking below $99.50 (and trending lower).
Brent Crude Oil
Oil finally made it above the midpoint of the range it has been trading in for some time. Let’s see what it does from here. We would like to see it trade all the way to $87.35, but we’re not sure that it will be able to do that immediately. It does look a little overbought here. Patience is needed here. Technically this is now in the middle of the range, so there is really no setup to be traded here.
Gold
Alrighty, gold broke the short-term downtrend and so far seems to be going for a move back to the highs. On the back of this chart (and move in gold price), we like gold stocks for longs in general here.
Platinum
Platinum has also put in the bounce we were looking for. Let’s see if it has enough legs to get back to the highs.
USDZAR
Ok, so maybe some bears get honey. The bear flag on the USDZAR has worked beautifully. We looked at this chart two weeks ago, then thought we were wrong and last week expressed our confusion. Seems all we needed was some patience as the ZAR went on a rampage last week. From here…? We wait for a new setup. We’ll likely see R17.60 soon, but let’s wait for it to consolidate there and give us some idea of what it wants to do next before we take any new trades.
Top Securities Broker Awards
Once again Herenya Capital Advisors is competing in the Intellidex Top Securities Brokers Awards.
Launched in 2010, the Top Securities Brokers survey (formerly Top Stockbrokers) is the Industry’s premier independent assessment of the industry.
The survey is based on a comprehensive survey of securities brokers as well as their clients, with high emphasis placed on client rankings of their firms across an extensive list of categories.
The online survey to find the top securities brokers in SA is now open, and we would greatly appreciate you taking the time to complete the 2023 online client survey and share your experiences.
To rank Herenya Capital Advisors click here.
The survey will take approximately 20 minutes to complete.
All participants are automatically entered into a lucky draw and stand a chance to Win R10,000, offered by Intellidex.
In the past year Herenya Capital has grown from strength to strength, not only have we been featured on some of the most revered platforms, but we have also been commended by our peers and our clients for our excellent service and tenacity to stay at the forefront of the finance industry. We also won the title of Best Stockbroker for Traditional Investors in South Africa. We would greatly your appreciate your support to help us take another title of two this year.
Please let us know if you have any queries or require additional information.
South African trade ideas
JSE Top 40 index (ALSI)
Oh how wrong we were last week on the ALSI. The super strong Rand lifted most of the market (although in very thin volume), while the pumping gold price pushed the gold stocks. This was the perfect storm for the ALSI longs. Well done to the bulls. We concede and we wait for another setup.
AngloGold Ashanti (ANG)
ANG bouncing off the trendline like a champion! We hope you got a decent long entry here. Keep a trailing stop loss and have some patience. We think we might have a proper winner here.
Capitec (CPI)
Banks have been strong and if the Rand keeps it up, banks will likely stay strong. CPI is headed for some resistance though in the form of a medium-term downtrend line. This makes us go “mmmmmm”…. Let’s see though, if it can break that downtrend it might put in a strong move higher.
FirstRand (FSR)
Sticking to the theme of strong banks for a little bit, we see a bull flag (flat) that has broken on FSR. This triggers a long trade with a good risk-reward.
Naspers (NPN)
Again we’re adding NPN because we think it is an important chart to keep aware of. We’ve spoken about the range for many weeks now. When this eventually breaks, there will be fireworks. Keep watching it and stay patient.
Netcare (NTC)
Maybe a cheeky little long here from the bottom of the range on NTC?
Reinet Investments (RNI)
RNI once again breaking a consolidation to the upside. Decent trend following long trade here we think.
Join a winning team
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 |
Subscribe for post updates
If you enjoy reading our blog and would like to get email updates each time we post, please subscribe below.
*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.