Now, yes, we did say this a few weeks ago and the market has remained persistently strong. Relatively at least… U.S. markets are slightly higher, but locally markets are slightly lower. So, no real fireworks just yet. Perhaps the momentum finally shifts down, and we see the market come off a little? Particularly in the over-hyped tech sector. Let’s look at some charts and get a better idea of why we’re thinking what we’re thinking.

*Also, please just note that as usual, the offshore indices we chart are in fact ETFs of those indices as those are tradeable. If you are not trading offshore for only $2 a trade, click on that open account button. Top right. You got it. Ok, time for charts.

Bigger picture (Offshore trade ideas)

S&P 500 (SPY)

This is ironically one of the charts that is not so clear to us right now. The levels marked in yellow are our up and downside targets. We think down before up and it should be noted that if $418.31 doesn’t hold, we could see this push to $400. Also, that does look like a double top, does it not?

Nasdaq (QQQ)

QQQ is a lot more clear to us than SPY. Once again we see the double top, but this time it is in fact directly below the resistance level we pointed out a few months ago. It feels like this bullish move has now run its course and it’s time to wobble a little. Our thinking is that we will likely see QQQ come off to test the previous significant horizontal level (also marked in yellow) at $333.57.

Philadelphia Semiconductor Index (SOX)

SOX found some resistance at the top of the channel. Momentum is shifting toward the downside, and if you squint just right you might see a little head and shoulders pattern. Look out below! Time to wobble.

U.S. Dollar Index (DXY)

Friday came along and said woah! It looks like that support at $101.30 is going to be tested once more. The question we are asking ourselves is ‘are we forming a base here or are we forming a flat?’. In other words, does $101.30 hold and this is the long-drawn-out starting phase of another bullish move over the next few months/years? Or, does the support break on the third attempt and we see the Dollar weaken substantially going forward? Time will tell. Time to wobble.

Brent Crude Oil

We could probably pose the question as above (with DXY) here on Brent. The way we see it is that Brent has been bouncing between the bottom and the mid-point of the range for a few months now. We’d like to see it break above $79 and head for $87. The start look aligned here. We’ll look at a Sasol long as well.

USDZAR

Time to wobble? But its so wobbly already! That’s a volatility joke by the way. This chart is, well, maybe we need new ideas and perspectives here. To us, this looks like a monster bear flag… but it could also go to R19.50. Let us know what you think on Twitter.

Platinum

Platinum might have gone a little far on the downside here and from our perspective it looks like it is going to try put in a little bounce here.

Gold

Gold is looking fairly bullish right now as well. At least, it looks like a decent bullish setup complete with a bearish equity market view to back the risk-off idea. Let’s see if it can get going.

Apple (AAPL)

This trend looks a little long in the tooth. We’ve marked out our trailing stop for AAPL longs. A daily close below $188.92 will stop us out of a position that has done really well. It is worth noting that when it is time to wobble for these giant tech stocks, the rest of the market will surely follow. The majority of the Nasdaq Index and a big chunk of the S&P 500 Index are in just a handful of stocks that are all highly correlated. Once the tech giants begin to wobble a little, the straw house that is the U.S. stock market at the moment is likely to be blow over.

Applied Materials (AMAT)

As a way of example, looking at AMAT, we see that our trailing stop has already been triggered. Now, AMAT is not as exciting as AAPL or TSLA or NVDIA or (insert any A.I. stock in here), but AMAT is a large supplier to many of these companies. Semiconductors have to be made somehow, right? AMAT might be the canary in the coal mine here.

Microsoft (MSFT)

MSFT is also teetering on the edge here. A daily close below $332.81 will trigger the trailing stop loss. As is the case with the illustrated trailing stop losses above, these could act as short entries for the more active traders. Just be warned, you’re betting against the trend, so keep tight stops.

South African trade ideas

JSE Top 40 Index (ALSI)

Well, well, well, if it isn’t the good old ALSI heading for the longer-term trendline? At least that’s our view. Buckle up, it’s time to wobble.

Compagnie Financiere Richemont (CFR)

It’s not often that you see such a beautiful break and retest of an established trendline. Textbook short setup here.

Naspers (NPN)

Going nowhere slowly… but, keep it on the watchlist as you can trade it between the levels, and when eventually this range breaks, it will do so in glorious fashion!

Shoprite (SHP)

Retailers have done alright recently. SHP underperformed a little over the last few days of last week though. It also looks to us like it wants to go test R192. It’s time to wobble, hold onto your stops!

Sasol (SOL)

SOL has bounced off this level once before… and then came back and slammed right back into it. With the Brent Crude Oil context above, and with this level actually holding fairly resiliently, we think that it makes a great long trade from here. Easy tight stop and a potentially a huge amount of upside.

Thungela Resources (TGA)

If you have been keeping an eye on energy demand forecasts, weather and other going-ns in the energy space in Europe, you will note that there is a slight shortage of the burny black stuff (coal) brewing. This once again plays into TGA hands. Combine that with a falling wedge, very recent higher lows, and you get what looks like a really good long setup for a medium to longer-term trade.

Anglo American (AGL)

Bullish divergence off a significant horizontal support level. Bodes bullish to us.

AngloGold Ashanti (ANG)

So the trendline broke and the head and shoulders worked out perfectly and the trendline is now being tested. Ok then. Given our thoughts on Gold (and Platinum) above, ANG might be presenting a nice long trade opportunity for those who are willing to take a little risk.

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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.

The post Time to wobble appeared first on Herenya Capital Advisors.

Bigger picture (Offshore trade ideas)

S&P 500 (SPY)

We’ve not drawn in the lateral support line here, but the SPY chart shows that the recent short-term bullish trends have broken. Momentum wise, it is starting to wane as well as the stochastic oscillator is about to dip below 50. For now, we think that is is very likely to see SPY move toward $385 as it tests the longer-term trend reversal. So, in essence, we are more bearish that our logo for at least a week or two from here.

Nasdaq (QQQ)

Looking at QQQ we see much the same as above with SPY, although here we have added in the lateral support line to show it’s significance. There are two ways to play this, the more risky way would be to already be short as the upward sloping trendline has broken, an the more conservative way is to wait for that yellow support line to break before entering the short. The same applies for SPY above.

Brent Crude Oil

Oil is still trading in the channel we pointed out last week. Until we have a clear break from this channel, we don’t plan to make any changes to our positioning.

Gold

A hit of hopium here for the gold bulls. Friday saw a decent reversal and the stochastic is starting to look like it wants to break higher. Perhaps if we see headline indices (as shown above) break down materially, we will see this gold price bounce and pust for $2000? For now we can’t tell, but keep it on the watchlist. Riskier traders can take a high-probability long trade from here (meaning a great risk-reward setup).

U.S. Dollar Index (DXY)

DXY needs to hold above 103.70 in order to keep the pressure on emerging market currencies.

USDZAR

Got Dollars? This chart makes us a little sad to be honest. As things are right now, we see now reason for this current trend to change.

Bitcoin (BTC)

Alright, so finally some good news. BTC is looking well on track with its four-year cycle and seems to be making a run for that 126 week moving average. It needs to get and hold above in order to start a new bull run. Remember though, this is a four-year cycle, so being near the beginning of year 3 of the cycle now, the best we can hope for over the next 18 or so months is a move back to the all-time high region. Only near the end of 2024 will it be time to sell again. Those that bought in November last year when we said Buy Bitcoin are up 50% already. Hang on in there guys, we have another year and a bit to go before we can sell again.

Ethereum (ETH)

We don’t have too many comments here, but things are looking a little better for ETH in our view as well.

Moscow Exchange (MOEX)

Weekly chart here on MOEX. Not the most bullish of candles last week, but overall this market is starting to look like it will recover. Worth having some exposure in our view.

S&P 500 Volatility Index (VIX)

We’ve not shown it here, but hedge funds are starting to load up on the VIX calls. So we will reiterate last weeks call and say again that buying some longer dated VIX calls (3 to 6 months out) is very likely a very good trade now.

South African trade ideas

JSE Top 40 Index (ALSI)

Ok ALSI, it’s make or break time buddy. Short-term bullish trends have broken… well, very almost on ALSI. Let’s see how Monday goes.

Naspers (NPN)

Ol’ NPN is still trading in its range. Watch for the breakout of this range. We think it will be lower and we think it will be rather explosive.

Reinet Investments (RNI)

RNI is also in a range. This one looks bullish to us, but we are open to following this trade in whichever direction it decides to go. A bit of a global equities sell off to fuel to ZAR weakness could work out well for ol’ RNI over here.

Shoprite Holdings (SHP)

Our SHP long idea from last week has not worked. Time to get out if you are not out already.

Sanlam Limited (SLM)

Nice little setup here on SLM that give two trade options, depending on which line breaks first. We think it breaks lower.

Sibanye-Stillwater (SSW)

It’s not looking good SSW. R32 is calling.

Thungela Resources (TGA)

It’s not looking so good for TGA either to be honest. R180 might be a good level to buy from, but until then, be patient.

AngloGold Ashanti (ANG)

Ouch! Is it over though? Who knows at this point? If the wheels fall off the global equities bus, maybe…

Anglo American PLC (AGL)

Short-term bullish trends have broken on AGL too. It’s not looking good.

Discovery (DSY)

Bullish break on DSY. At least some good news in a rough market.

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

Offshore stockbroking rates

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.

The post Short-term bullish trends have broken appeared first on Herenya Capital Advisors.

Bigger picture (Offshore trade ideas)

S&P 500 (SPY)

It seems the pullback is happening, and our poop emoji was right. Let’s see if it breaks back below the trendline or if it finds support there.

Nasdaq (QQQ)

QQQ is also pulling back decently and as is the case with SPY, it looking overbought and ready to pull back. Again, the downward sloping trendline here is the key potential support level.

S&P 500 Volatility Index (VIX)

A bit of a reversal candle on Friday, but overall still looking like it is trying to build a base here and stage a bit of a rally. We think a call option here is a good trade.

Gold

Despite the risks in the macro environment, and overall bearish feeling of headline index charts, Gold is not looking to positive. Currently the price action setup looks rather bearish with a potential move down toward $1676, although momentum wise it looks like it might have gone a little far. That said, the stochastic oscillator does sometimes tend to remain at the extremes for extended periods. That might just be the case here. Riskier momentum traders would likely take longs here, although the safe bet is to rather sit this trade out and wait for a clearer setup.

Brent Crude Oil

Oil is playing some mind games and not really caring too much for our channel. Overall, we are and have been bullish on Oil for a long time. Nothing it our view has changed enough to make us change that view. That said, charts are charts and we’ve highlighted a small channel in white that is worth keeping an eye on. There are two ways to see this; 1. the downward sloping channel has broken, been retested and will confirm the return of the bull trend once the previous high is breached, and 2. the downtrend is still intact, the downward sloping channel has widened, and the white smaller counter-trend channel will provide a good short entry once it breaks. Which one is right? We suspect the new week will show us. Our bias is for option 1 though.

U.S. Dollar Index (DXY)

DXY has bounced well off the 101 level and has now gotten stuck under 103.50. Once above, it’s clear skies for the Dollar and we’ll likely see the greater equities market come under some pressure. We shudder to think what a DXY move back up to 114 is going to do to the poor ZAR.

USDZAR

Here we go! USDZAR has broken the range and is looking like R18.50 is not going to be a strong enough level to hold it back. Do we get to R20? How bearish is too bearish here? Let us know what you think on twitter. We’ll randomly select someone who replies to hang out with us in our community for 6 weeks

South African trade ideas

JSE Top 40 Index (ALSI)

The trendline draws near. Watch out if/when it breaks!

Coronation Fund Managers (CML)

When good charts go bad! Nothing like a nasty, undisclosed tax liability and cutting the dividend to end a potential bottoming pattern. In the long run, it’s probably not the end of the world, but shareholders are clearly not very happy at the moment. As for the inverse head and shoulders pattern here, very technically, it has not stopped out yet. It will need to take out the lows of the right shoulder before it is fully invalidated. Does that mean there is hope yet for the bulls? Time will tell. Stick to your stops.

Naspers (NPN)

Decent trade setup here on NPN. We are bullish this stock and setup, but be open to the range breaking lower. Either direction will give a decent risk-reward trade with a clear stop loss.

Shoprite Holdings (SHP)

SHP looks like a decent long from here, at least back to R250.

Sibanye-Stillwater (SSW)

The support zone did not hold and it looks like SSW has opened up for a R32 price target.

Transaction Capital (TCP)

TCP chart still doesn’t look very good. A fresh push lower last week opens the stock up for a R27 price target.

Thungela Resources (TGA)

TGA chart also looking pretty nasty to be honest. Looks like the R180 handle on the table. Where too from there though?

Anglo American PLC (AGL)

Well, another broken upward sloping trend line. Our long trade idea here is now off the table. It looks like we’re going to see at least R650 on AGL in the near term.

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

Offshore stockbroking rates

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.

The post When good charts go bad appeared first on Herenya Capital Advisors.

First – it is an enormous opportunity to get into the stock market, especially if you are a passive saver making monthly contributions to an index ETF or fund of sorts. If you can, double your monthly contributions to equity investments. It may be difficult to work this into already pressured budgets, but over time you will thank yourself for tightening your belt now and buying more and more as the market dives deeper and deeper.

Second – there is no reward without a little pain. The reality here is that if you increase your investment now, you will feel some pain in the short-term as you watch new contributions shrink each month just for you to add more into a shrinking pot. It is not going to feel good. The truth is that you will not be able to perfectly time the bottom, so cutting monthly contributions until you are convinced that things are better will very likely mean you miss the bottom and miss the chance to get great overall market (index based) exposure at a decent average price. Doing the right thing is never easy, and even more so when you are acting in your own best interest. Bite the bullet, act in your own best interest and take the short-term pain. The reward is years away, but it will be worth it.

If you would like for us to help you with a solid investment plan for the next five to ten years, contact us and we’ll gladly help.

An on that note, let’s move onto some shorter-term trade ideas. As mentioned above, it’s not looking good out there are we are seeing nothing but shorts.

Offshore markets

S&P 500 (SPY)

As usual we start with SPY. We’ve been aiming lower for long while now and nothing has changed. Our target remains indicated on the chart as it has been for many months. The question we are asking ourselves now is whether or not the 3370 index level is going to be the bottom, or just a brief support level?

Nasdaq (QQQ)

Looking at QQQ shows a similarly dire picture (as is the theme of this post in truth). We’ve marked out the previous (pre-covid) high, which as is the case above, should serve as both a target and support level for the current equities rout.

Philadelphia Semiconductor Index (SOX)

More of the same for the semiconductors. We guess we’ll see how this, and the indices above, behave when they get to their respective pre-covid highs.

U.S. Dollar Index (DXY)

We’ve pointed out before that the Dollar was last this strong during the dotcom crash, so we thought we would show it again for context. It won’t happen in a straight line, but we think that the 120 level on DXY is rather realistic given the circumstances. Make no mistake, this is putting severe pressure on U.S. corporate earnings as well as commodities, and the real damage will become apparent in the next earnings season.

Gold

Talking about commodities coming under pressure, gold seems to have broken its support level. Although we hold some gold exposure in our long-term portfolios, the short-term picture looks pretty bleak. Our initial thought after this break is that we might see $1480..? The thing is, if we see proper panic in markets in the next week or two, people will sell everything. This means that even the ‘safe haven’ assets will be sold off in the panic and mad rush for liquidity. Perhaps we see a similar washout to $1480(ish) as we saw during the onset of the covid panic days, before gold catches a bid and starts behaving like the ‘safety’ it is supposed to be?

Brent Crude Oil

Is this it? Has oil cracked support and is finally going to give in to the negative pressure of contracting global GDP? Or will OPEC+ cut more production and defend $90 with everything they have? Stay tuned for this week’s instalment of Energy Markets Gone Mad! Jest aside, that is actually a serious set of questions.

USDZAR

Weekly chart here just looking at the trend on USDZAR. It’s not looking good folks. Unless you have Dollars, then it’s looking awesome. Are we going to see R20 to the USD within the next six months? Probably.

Bitcoin (BTC)

Over the longer-term we are still bullish on BTC, but we want to reiterate that we would only be buyers closer to the support level, which is currently around $16.5k. The chart looks fairly bearish, so there might even be a chance to get some BTC below the support level. If the world is going to panic, let it panic. Just keep your own head cool and try not get trampled as the masses rush for the lifeboats. As mentioned earlier, this is a massive opportunity to make some very good long-term returns. Be patient and be decisive. But mostly, be patient.

Ethereum (ETH)

Great insights on ETH merge from Geo here (Geo interview podcast). Do we get a chance to load up around $750?

South African trade ideas

JSE Top 40 Index (ALSI)

It takes a little time, but charts often work out. Our target remains set at 53k. For those that are short this index, an ATRx2 trailing stop loss would be appropriate from here. You need to give it some room to breathe, but also need to make sure that it doesn’t rip against you and take back all the gains. Let’s see how long it takes to get to 53k and how it behaves once there. For now, enjoy the ride.

Investec (INL)

Well, nothing but shorts were promised, so nothing but shorts we’ll show. Nice rounding top here on INL with a scary low target at R41.20. This will be a slow grinder of a trade if it reaches target, so a volatility based tailing stop (like ATRx2) should too well to manage risk here.

Compagnie Financiere Richmont (CFR)

We’re pre-empting a massive head and shoulders formation here, but we’re pretty sure that we’re not the only ones seeing this… right? Would love to hear your comments, let us know what you think on twitter.

British American Tobacco (BTI)

Well ok then. We looked at BTI some time ago and pointed out this flat top triangle. Our thinking was that in a much weaker ZAR environment BTI could break out nicely toward the upside here. But now the market theme is nothing but shorts and BTI had a proper daily close below the trend line. We are tempted to hit the short here, but think we might have to do this trade in half-size.

MTN (MTN)

R91.42 is a long way down, but we can’t see anything holding the stock up to prevent it from testing those levels. At least not right now.

Naspers (NPN)

The support level shown two weeks ago has broken and it looks like the gap-close trade is on. Stop to entry and let it ride for now.

Remgro (REM)

R125 is a key level to watch on REM. A daily close below R125 will trigger a short trade. Some might see a head and shoulders top here… some might see a rounding top (depends just how much you squint your eyes to make sense of it). Either way, we think that a break of the key support will offer a great opportunity to get into a short trade around a level that confirms a medium-term trend change.

Shoprite (SHP)

Not the greatest of clearest setup here, but SHP could come off and test the R192 level again in what looks like it could be a rather large range. If R192 fails to hold as support, we are looking at a massive double top which would target around R130 if it plays out. Patience here. but keep it on the radar.

Sasol (SOL)

Perhaps a bit late to catch the short now so we will not chase. This chart just serves as a case study to show how effective simple trend line and range breaks can be to identify a changing trend (and trades of course).

Sibanye-Stillwater (SSW)

R31.79 coming up by the looks of it. That would probably be a good level to buy at to be honest, but until them we suppose we wait.

Transaction Capital (TCP)

TCP is another great example of a simple trend line being extremely useful. Now though, we see support around R35. Keep a close eye on that support because a break below that would likely target R26.80 and would make for a great short trade.

The Foschini Group (TFG)

Another stock, another key support level coming up. If TFG breaks below R118 on a daily close basis, odds are very good we’ll see R90.

*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 resource

The post Nothing but shorts appeared first on Herenya Capital Advisors.

Not a pretty sight…

In all seriousness though, it has been a difficult year so far and odds are that it is not going to get much easier any time soon. This week we will look at a few ideas, but take them with a pinch of salt because the market is rather wild and unpredictable at the moment.

Offshore trade ideas

S&P 500 (SPY)

We never saw the early week strength we expected last week, but instead had almost one-way traffic lower until Friday. This week we are not willing to make a weekly opening call, but we will say that we still expect that the headline US index trades lower in the coming weeks. Our target currently is the 3400 index level ($340 on the SPY ETF). This level was the all-time high before covid derailed the world in 2020.

MSCI China ETF (MCHI)

We still favour MCHI over SPY at this stage and it seems that we are starting to see a trend reversal here. We saw some good fundamental news coming form the textile manufacturing industry in China over the weekend as well. This strengthens our view that long-term investors should start to allocate capital to eastward facing investments.

Brent Crude Oil

We moved our tertiary trend line just a little lower, although this chart is still ‘make or break’. Recession fears will put some downward pressure on oil, although supply constraints exert force in the other direction. Our base view is that energy in general still has some way to go before it peaks, although a multi-month correction before the trend continues is not outside of possibility. For now we are sitting tight and allowing time and price to lead us.

Gold

Honestly, we can’t really wrap our heads around why gold is not trading higher. We saw a pretty mean hammer formation right on a key support level on Friday… so perhaps this week is the one?

Bitcoin (BTC)

BTC is now trading below the previous all-time high and looks set to test the long-term trend line around $15k. Hold onto your hats if you’re already long, and if you’re not, maybe a buy at $15k is not a bad idea.

Ethereum (ETH)

ETH will take its lead from BTC, although it is starting to look like the time to buy is approaching. As is the case with BTC above, DO NOT USE LEVERAGE with these crypto’s. You are welcome to start nibbling at them, but it is not yet time to buy big. Much more panic and pain has to come before we can really get involved here.

Northrop Grumman (NOC)

Forgive our cynicism, but war is good business for weapons manufacturers. NOC is making its second attempt at a break out higher. It looks like this time it has legs.

South African trade ideas

JSE Top 40 Index (ALSI)

The pressure is on and our view is bearish. We think that there could still be rather a lot of downside in our market over the coming weeks and months (rest of the year) and have a target around 53000.

Sasol (SOL)

This chart will only get worse if oil does not manager to hold its tertiary trend line. We flagged this trend line break a few weeks ago and sincerely hope that you managed to take action in time.

Steinhoff (SNH)

SNH starting to look a little ‘make or break’ here. Remember that the stop loss for this trade is below the long-term trend line.

The Foschini Group (TFG)

TFG is looking like a great short trade once this R118 support level fails.

Shoprite (SHP)

We didn’t draw it, but you can see the Head and Shoulders, right? R191 might put up a fight (and possibly a bounce), but realistically we could see R170 in the coming weeks.

Truworths (TRU)

It’s not looking good for TRU either. High probability setup with a really tight stop on the short trade here.

ABSA Group (ABG)

No doubt there will be those who see the Head and Shoulders on ABG. We think this stock can trade to R136 in the coming weeks. Decent high probability short setup here.

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

Offshore stockbroking rates

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.

The post Independence day! appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 (SPY)

There is no real setup here for now. We are cautious of a possible correction move back to the 50 (then 89) day moving average. That would not be a significant move in terms of the primary trend though. For now, the bullish trend is strong. My two cents… the Fed prints so much, for so long, that eventually when all the Covid-induced supply chain bottlenecks ease up and inflation slows, the world will be so happy that it just keeps pushing the ‘everything bubble’ for another decade. Perhaps that is the complacency that will eventually bring equity markets down..? Time will tell.

Dow Jones Transportation Index (DTX)

Weekly chart.
Is that a bull flag that just triggered a long?

U.S. Dollar Index (DXY)

That $93 level must be made from stone. The high probability (best risk-reward) short-term trade here is now the short trade to $89. Not one that we would rush to put on, at least not until DXY can get back below the 200 day moving average.

USDZAR

So alright, the USDZAR is now above the 200 day moving average. If the DXY (above) can finally get above $93, and this 200 day moving average on the USDZAR can hold, the longer-term trend change looks like it’s on the cards.

South African trade ideas

JSE Top 40 Index (ALSI)

I hate to say it, but bearishness begone! This chart has strictly speaking triggered a long trade. We’ve also seen that global net flows into equity funds ex-US has surpassed flows into US equity funds on a weekly basis for the first time since September last year. Perhaps it’s time for emerging markets to catch a bid?

Shoprite (SHP)

Very nice breakout and retest of this flat top triangle on SHP. Entering now does not offer the absolute optimal entry point, although if you are willing to sit in a trending stock for a few weeks, SHP is likely a good pick.

Anheuser Busch Inbev (ANH)

We’ll probably post a range of updates on this trade in the coming weeks. Back to the top of the range with a stop loss below R875.

Compagnie Financiere Richemont (CFR)

We were trail stopped out of this trade a short while ago although have to say that it is looking like it wants to make another break higher. Perhaps a smaller, more speculative long position this time?

Mediclinic International (MEI)

Over the last year or so MEI has bounced well (top the top of the range) from this support zone. Granted this is no the absolute bottom of the range, but it is a significant horizontal support from which we see a shift in momentum towards bullishness.

MTN (MTN)

Weekly chart here to show some perspective of where this stock once was. We think that over time (as in, over the next few years) we might see MTN back to it’s highs. In the very short-term though, we’ll probably see some consolidation for a few weeks as the stock tries to find a foothold above the R120 level.

The Foschini Group (TFG)

TFG finds itself back at the bottom of the range it has been in for a few months now. Ths presents two trading opportunities. First, the range trade back to the top of the range. Second, an entry point into a longer-term trend following trade. Failure to hold this bottom support though would invalidate this trade idea and have us relooking at a long around the R136 level.

Telkom (TKG)

Our TKG trade from last week has not worked. There is a good chance that the 200 day moving average could be support, although below that, all bets are off.

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

Offshore stockbroking rates

*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.

The post 12 charts we’re watching appeared first on Herenya Capital Advisors.

Interestingly we say the U.S. Dollar weaken during the last week. We’ve been eyeing a break out from below the current resistance for some time, although the break out has not come. Should we see another week of Dollar strength, that could translate into strong performances on ‘local’ stocks such as banks and retailers. An interesting week no doubt lies ahead.

We remain cautious of global equity markets in general as we are seeing a number of mixed signals. To be specific, the tech space has been probably the primary driver behind market performance over the last few years and it is here that we are starting to see conflicting signals.

Offshore trade ideas

S&P 500 (SPY)

Daily chart.
Nothing too fancy here right now. SPY has been trading in a small range that could offer a decent risk-reward trade when it breaks. At this stage we are agnostic on which way this might break. Probably a slightly higher probability for a break lower, although we will wait for a trigger of sorts before taking any short-term trades here.

Russell 2000 (IWM)

Daily chart.
The IWM is still somewhat of the canary in the coalmine for us. Looking at how it is trading in the range, the fact that it got stuck under the shorter and medium-term moving averages in the middle of the range is something we consider to be bearish. Again, there is no real action for us to take on this index ETF until either one of the range extremes are breached. Momentum is seemingly turing bullish, but there is no high probability entry for us here just yet. So we wait and see.

Nasdaq (QQQ)

Daily chart.
This is where things start to get a little confusing. Well, not so much on QQQ. Looking at this chart we note some bearish divergence. If looking at shorter timeframes, we will likely be able to find a valid short setup as well. Market Breadth is still somewhat weak and if eventually that weakness catches up to the mega-cap tech stocks, this could get really ugly really quickly.

Philadelphia Semiconductor Index (SOX)

Weekly chart.
So this is really were the mixed signals start.

On the left, we have a flat top triangle that has triggered a long trade. There are also signs of bullish momentum and the possibility of a buy signal being generated to support the bullish break from the triangle formation. On the right, we have a rising wedge formation with evidence of bearish divergence. So which chart do we trade? We suppose that given the uncertainty, it would be wise to trade neither of them. It will be interesting to see in a few weeks which one was in fact the correct setup.

U.S. Dollar Index (DXY)

Weekly chart.
The $93 level holds again! There is some bearish divergence too. Perhaps over the coming weeks (leading up to Jackson Hole) we see more Dollar weakness? This would play out well for ‘local’ stocks.

Brent Crude Oil

Oil is still looking very constructive. Interesting to note that the U.S. now buys more oil from Russia than ever before, making Russia the biggest international oil supplier to U.S.. Our view is unchanged. Energy demand is continuing to pick up as the world economy is coming out of lockdown. Supply and demand… as energy demand continues to increase over the next year and supply is not really matching the demand increase… price has only one way to go.

Gold

Weekly chart.
Not much has changed on this chart over the last week. Our view is still somewhat bullish given the ‘inflation is not transitory’ narrative.

USDZAR

We’ve got mixed feelings on the USDZAR as well. When looking at the weekly chart, it appears that we have a decent setup for some longer-term weakness. In the short-term though, should the DXY come off in the coming weeks, we might see a stronger ZAR as a result. In the medium-term though, USDZAR seems to be going through a significant shift of momentum towards weakness. As things are right now, we’d encourage investors to buy USD.

Bitcoin (BTC)

Weekly logarithmic chart.
It might be a little too early to talk, but it looks like after a few fake outs and scary moments, the $35k level held. Onwards and upwards from here?

Ethereum (ETH)

Weekly logarithmic chart.
Looks like that falling wedge formation is playing out. Lots of buying happening over the weekend. Perhaps phase two of the 2021 general crypto moon rally is about to start?

U.S. stock picks

Advanced Micro Devices (AMD)

Weekly chart.
AMD had a huge break out last week. We think that this stock, and other semiconductor and microprocessor manufacturers, could continue to see a decent rally on the back of higher cryptocurrency prices.

Applied Materials (AMAT)

Weekly chart.
AMAT has not broken out just yet, although this setup does look like it wants to break to new highs.

Silicon Motion Technology (SIMO)

Weekly chart.
SIMO also put in a break away week and earns it’s spot on our bullish watchlist.

Five Below (FIVE)

Weekly chart.
A rather decent looking long setup on FIVE as well. We’d likely be buyers above $200 with a trend following, trailing stop loss.

Texas Instruments (TXN)

Weekly chart.
Another semiconductor manufacturer, another bullish setup. A break to new highs would trigger a trend following long trade for us.

Global Blood Therapeutics (GBT)

Weekly chart.
We pointed out GBT as a potential short trade last week. So far so good. Below $26.82 targets $16.59.

Agios Pharmaceuticals (AGIO)

Weekly chart.
AGIO on the way back to the bottom of the range. Not too much meat left in this trade unfortunately, although aggressive traders could sell below the 89 week moving average with a target price at the bottom of the range.

Wells Fargo (WFC)

Weekly chart.
WFC could be setting up a nice bull flag here, which in turn could lead to a decent break out from below the 200 week moving average. This is a stock to watch.

South African trade ideas

JSE Top 40 Index (ALSI)

Daily chart.
All the way to the top of the range again. In truth, this charts looks rather constructive. The highest probability trade here (with the highest possible risk-reward) would be to short it back to the bottom of the range. Your stop loss will have to be right above the highs made on Thursday though. You don’t want to be caught short if this thing breaks out.

ABSA Group (ABG)

Daily chart.
ABG is ticking a lot of boxes for a long trade. A stronger ZAR in the short-term will be a great backwind for this stock (and other banks, financials and retailers in general). Target for the long trade at R150, with a stop loss at R130, makes for a decent 1:2 risk-reward.

Anheuser Busch Inbev (ANH)

Daily chart.
ANH dropping like a stone. We like the idea of buying the R880 support.

Discovery (DSY)

Daily chart.
DSY looks like it is in trouble here. Only a stronger ZAR can save it now (jokes). This chart does look like it wants to go test the R105 level in the coming weeks. Still a greater than 1:2 risk-reward on the table here for the short trade (stop loss above R120, target price at R105).

Shoprite (SHP)

Daily chart.
Retailers have been wonderfully strong of late and SHP is no exception. This looks like it could be a large ascending triangle formation that it building towards a break out. In a strong ZAR environment, retailers might prove to be a good long play.

Transaction Capital (TCP)

Daily chart.
TCP is turning out to be one of those stocks that you always want to buy, but always think that it’s run a little hard and you will buy in a pullback… only for that pullback never to come and you sit on the sidelines wishing you had just bought the stock. From a trend following perspective, it does seem that the opportunity to get on the bus is finally here.

The Foschini Group (TFG)

Daily chart.
No trigger just yet, but TFG is worth having on the watchlist as a potential break out long trade in a strong ZAR environment.

Telkom (TKG)

Daily chart.
TKG offering a nice long entry off the primary trend line. Clear stop loss makes for a good risk-reward trade.

Truworths (TRU)

Daily chart.
TRU also looking like it is going to be a winner in a stronger ZAR environment. Not as clear a setup as TFG, but a volatility based trailing stop loss could be the play here for a small long position.

And that is all we have for this week. As usual, if you would like to know more about trading with us, our very competitive brokerage fees (epsecially on offshore trading) or joining our community, please feel free to contact us and we’ll be in touch.

*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.

The post Mixed signals appeared first on Herenya Capital Advisors.

Open short-term trades

Anglo American Platinum (AMS)

Our initial trade idea here did not go so well as it broke the 89 day moving average and stopped us out. We have subsequently re-entered the long trade around R1860, so again we are taking some pain. Pain aside, this setup is looking really good and once the immediate (tertiary) down trend breaks, we think that there could be rather a lot of upside for this stock. This is one of those trades that we’d be happy to hold for a long time, as long as it is working. We will likely bail out if the swing lows are taken out, but we’d like to give it another week to see if the stock can catch a bid and break out. We’re looking for a retest of recent highs as our target price range.

Compagnie Financiere Richemont (CFR)

We took two-thirds of this position off as the range break out target was reached (R150 to R162). The last third remains open on an ATRx2 trailing stop loss. This should allow the trend to do its thing over time, without this position posing (relatively) much of a risk to the overall account.

Naspers (NPN)

NPN is trying to build a base here. We are long with an oversized position at the moment (in around R3150). Once again we’re taking a little bit of pain of here, but our stop loss is below the support base it has been forming over the last couple of weeks (a break below R2900 would take us out). Momentum wise it’s starting to look better too. We’re expecting the overall up trend to resume in the coming weeks (i.e. NPN to trade above the 200 day moving average and likely push for the previous highs).

Old Mutual (OMU)

We bought the break around R13.30. We’ll take two-thirds off at R15 and leave the rest on an ATRx2 trailing stop loss.

Reinet Investments (RNI)

We’re long RNI from about R264 (position opened on the 13th of May). So there is not really much for us to do here other than sit and wait for the trade to work out. Currently our stop loss is at R274, based on ATRx2 on the daily timeframe.

Standard Bank (SBK)

At R140 we’ll likely take off two-thirds of the SBK position and let the rest ride on an ATRx2 trailing stop. As it stands now, we are long from around R120 and our stop loss is currently at R126.50.

Shoprite (SHP)

We entered SHP long sub-R148.50 with an eye on R160 – R164 as a price target range. Currently our stop loss is set at R150, just to protect us from the potential of this trade turning into a loser. Once SHP gets clear of R156, we’ll either move our stop up to R152 (the bottom of the current range) or set it according to ATRx2 rules, depending on which is higher.

Ethereum (ETH)

We are currently long ETH. Although the swings can be wild and scary due to the sheer size of the moves, we think that from here to the end of the year, we should do ok on this trade. It’s going to be bumpy, but we’re buckled up and happy to actively trade in and out around the core position. We also know that pullbacks in excess of 60% are very likely and note that the current pullback is still within historic parameters for the instrument.

Let us help you with your trading

We truly have an amazing community of traders who are all focused on improving their trading results and skillsets by working together and continuously learning. You will certainly benefit from the support we and our community members provide to each other. If you are willing to put in the work, we and our community can help you on your path to becoming disciplined and consistent in method. Alternatively, we are able to manage a short-term CFD trading account for you.

If you would like to know more about our trading account, or managed CFD trading account offerings, please do not hesitate to contact us.

*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.

The post CFD account update appeared first on Herenya Capital Advisors.

Bigger picture

S&P 500 (SPY)

SPY has been tricky over the last two weeks. It seems to have formed a range, with range support coinciding with trend support. Stepping back a bit, we note that the trend is up and that downside momentum is fading. A confirmed bullish break from that range could provide a decent short-term long trade with clear risk management parameters. That said, the market in general is rather long in the tooth. Even though we remain bullish in the very short-term, we are concerned about the sustainability of the bullish trend in the medium-term. We feel that, especially for longer-term investors, it would be prudent to start thinking a bit more defensively.

Russell 2000 (IWM)

IWM is starting to look rather interesting. It’s approaching the longer-term trend line and forming a small wedge in the process. It is important to note that ‘market correction’ can also come in the form of a sideways consolidation, allowing the trend line to catch up to price before a trend continuation move takes place. In other words, this slow drift sideways over the last three-or-so months could count as a correction. This of course depends on how IWM reacts once it tests the (blue) longer-term trend line. Our view? Currently; be patient and wait for a decent long entry off the longer-term trend line, or once the wedge formation breaks. Much time needs to pass before either of those two setups happen though, so for now there is not much for us to do really.

Nasdaq (QQQ)

Despite the general warnings above, we do think that taking a long position in QQQ could be a good play for the coming weeks. In the short-term, the overall market still feels like it wants to trade higher and QQQ if offering a decent trend following setup. Momentum is shifting upward once more and trend support held well. Stop loss would be below the trend line, around $315. Once clear of previous highs, you could use a 2 day low trailing stop.

Dow Jones Transportation Average (DTX)

DTX is a bit worrying. It has been trading in a very tight channel for some time and has now finally broken out it. This brings an end to a really strong rally. Momentum has turned rather bearish too. We’re expecting for DTX to move down into the area between the 50 and 89 day moving averages (1500 to 1400).

Gold

Gold has broken the recent short-term downtrend by breaking both they key resistance around the 200 day moving average and the downtrend. From a longer-term perspective, Gold is once more in a bullish trend. In the very short-term though, we would not be too surprised to see Gold retest the $1850 breakout levels. If the $1850 level/zone can hold, we should be setting up for new highs for the Gold price in the medium-term.

Palladium

Platinum miners have been under pressure in recent weeks and looking at the Palladium price might help put that weakness in context. Palladium is approaching support around $2700. Let’s see how it holds (or fails) once support is tested.

Platinum

Platinum has also been under some pressure for the last few weeks. As is the case with Palladium, there is no real immediate high probability play here, although a bounce from the $1140 level is a strong possibility.

Brent Crude Oil

We can’t ignore the possibility of Oil forming a potential double top. For now there is no play in Oil for us, although we’d be interested in buying if Oil makes it down to the trend line support.

U.S. Dollar Index (DXY)

Although the overall trend here is down for DXY, we note some bullish divergence could lead to a bounce in DXY. Perhaps a retest of 91?

USDZAR

We suspect that the fate of the USDZAR lies firmly in the hands of the DXY. Should the divergence in DXY not lead to a stronger USD, we could still see the USDZAR trade towards that R13.50 level.

Bitcoin (BTC)

Weekly logarithmic chart.
We marked out the $35k level a good number of weeks ago. BTC has now, rather dramatically, dropped to test the $35k level and we think it’s time to buy Bitcoin. 45% corrections are not out of the ordinary for BTC from a historic price action perspective, so as long as you are not geared or overexposed, BTC is offering a great buying opportunity. Remember though, treat BTC like it is a normal stock and do not allocate more to it than you would normally allocate to a stock in your overall portfolio. If you can do that, then it’s time to buy Bitcoin.

Ethereum (ETH)

It’s time to buy Bitcoin? It’s also time to buy Ethereum. ETH has similarly dropped to a key level and we think this is a good level to buy some.

Where to buy cryptocurrencies?

We get asked a lot if we are able to help people buy Bitcoin or other cryptocurrencies. The short answer is no, we cannot. We do however recommend that if you want to buy cryptocurrencies, that you buy them through a reputable exchange, such as;

VALR – South Africa
Luno – South Africa
Bitstamp – United States

These are all ‘spot’ markets / exchanges that will allow you to buy the actual underlying cryptocurrency. It’s time to buy Bitcoin, yes… but it is never time to use gearing to buy it. Rather buy the real deal from a real exchange. Do not use leverage.

South African trade ideas

JSE Top 40 Index (ALSI)

We don’t really have a good read on the ALSI at the moment. The ALSI is still in a support zone, although Friday’s candle does not inspire much confidence. We’ll be sidestepping this instrument in the week ahead.

Reinet Investments (RNI)

Weekly chart.
RNI could be offering a decent long entry at the bottom of a weekly symmetrical triangle. With a stop below R260 and a solid weekly setup, this could be a great trade back up to the R340 level or higher. Note this is a weekly timeframe and that this trade will take rather a long time to play out.

Shoprite (SHP)

SHP trade is off to a good start. Stops to entry (or break-even after costs) with offers in for target prices.

Sasol (SOL)

We’ve stopped out of our CFD long trade on SOL. From here we wait patiently for another setup. Depending on how Oil trades, there could be a decent short trade to R180 on the cards here. We’re going to be a bit cautious and just do nothing for now. Our fundamental view is bullish, so we’ll rather wait for another chance to get long.

Compagnie Financiere Richemont (CFR)

CFR has broken the range it has been consolidating in for some time. Although the close on Friday was in the middle of the daily range, we think that we could have seen a breakaway gap. We are currently (still) long CFR and will be using a trailing stop loss from here.

Old Mutual (OMU)

OMU has been on our radar for a while. It once again attempted to break the downward sloping trend line on Friday. Once that trend line break is confirmed by a daily close, we think OMU offers a great long trade. From here, our initial target is R15.

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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.

The post It’s time to buy Bitcoin appeared first on Herenya Capital Advisors.

Twitter chart requests

Harmony Gold Mining (HAR)

HAR seems to be forming a fairly solid base. We’d have to wait until the 200 day moving average (green) is broken before we can confidently say that the trend has once against turned upward. For now though, the rounding bottom seems to be forming well with the R62.40 zone being the key support. Overall we are bullish on gold stocks in the short-to-medium-term. We hold ANG in the long-term portfolios, although HAR is looking fairly decent for a smallish long position with the view of the trend potentially changing and HAR headed back to previous highs.

Iron Ore Futures (FEF1!)

Iron Ore has been on a bit of a tear lately. The last two days of last week saw it pull back rather violently from the recent highs. For now we don’t really see a tradeable setup here, unless FEF1! falls into that support zone (indicated by the blue circle). Overall, commodities are rallying on the back of the post-pandemic (printer driven) recovery. What is important to note here is that the primary driver for FEF1! demand is Chinese manufacturing and construction. China seems to be on a good footing at present and in our view, are likely to continue to recover (and grow) faster than the rest of the world. If you can get long between the 50 day and 89 day moving average, you might be in for a decent trend following swing trade.

Kumba Iron Ore (KIO)

KIO can be tricky, although it seems to have broken out of, retested and held the range. You could take a long here with a tight stop (below Friday’s lows). Should the R680 level fail, the play would be to try get long again around the R550 mark.

S&P 500 Volatility Index (VIX)

Weekly chart.
Things got a little choppy last week, but the VIX managed to end the week below 20 (again). It seems that ‘things are returning to normal’. Lower volatility, unlimited ink in the printer, post-pandemic economic recovery… we hate to say it, but things are looking fairly good right now.

Naspers (NPN)

NPN has gone a little far here in our view. We can see that in recent history, whenever it has gotten this far below the longer-term (200 day) moving averages, while making exhaustion gaps, it has provided good entries for long positions.
Disclaimer: we used this opportunity to add NPN to long-term equity accounts.

Dis-Chem Pharmacies (DCP)

DCP has had a great run. We would not be shorting it here, although we would definitely be taking some profits off the table.

Sibanye-Stillwater (SSW)

SSW made a nice little hammed right below a key support zone. Momentum wise it is in the middle of nowhere, but a small long with a stop below Thursday’s low could be a good trade here.

Standard Bank (SBK)

4 hour chart.
We are watching the inverse head and shoulders formation here and are currently long on CFD. Short-term trade target would be the 200 day moving average, with a trailing stop once reached. Hard stop below the right shoulder.
Disclaimer: we added SBK to long-term equity accounts last week.

Grindrod (GND)

GND is tough to read… so we’re going to sidestep this stock for now. We are watching that falling wedge on the stochastic oscillator though. If that breaks higher, it could offer a long trade. We need to wait for confirmation though. If GND trades as low as R4.25, we think it would be a decent buy at those levels.

Netcare (NTC)

NTC is not providing a high probability setup at the moment. There is a nice range to watch though. We’ll need some patience to see what it does around the R15.50 level.

FirstRand (FSR)

Technically, FSR broke out of the range and held above it by the end of the week, so you could take a long here with a stop in the middle of the range.

Investec (INL)

We got stopped out of a good long trade on INL for a loss last week. Our stop was just too tight and the few trades below R52.50 triggered out stop loss. This would have been a good long trade in our view and it is unfortunate that we were stopped out. Can’t win them all.

City Lodge Hotels (CLH)

CLH is a bit of a tricky chart. It looks like it is getting ready to take off. We would like the chance to buy for long-term accounts if it once again tests the zone between the 89 day and 200 day moving averages (between R3.30 and R3.70), although by the look of this chart, that seems rather unlikely. We might just have to pay up for this one.

JSE Top 40 Index (ALSI)

By the looks of things, there are around 3000 or so points on the table for the longs (for the range trade). Nice solid up trend in place. Overall macro risk-on sentiment and South Africa’s present deep undervaluation should see the ALSI break through the 64k level and keep trending higher.

Shoprite (SHP)

Another inverse head and shoulders pattern in the making. As requested, we added stop and take profit levels for a long trade here. What we like most here is how SHP has been holding the support/buy zone over the last few weeks (green shaded area between 50 and 89 moving averages).
Disclaimer: we added SHP to long-term portfolios last week.

Gold

Gold has reached the resistance level. Now the waiting game begins. Once the 200 day moving average is broken to the upside, we could be looking at a proper medium-term trend change (and a return of the bullish trend). Inflation caused by enormous monetary stimulus will likely be a strong driver of the gold price in the coming months. Be patient though, $1848 is a strong level, wait for it to break.

Silver

Silver is not really presenting us with anything that we would consider a setup. That said, the trend is up. If we could see it get back above $28 (and hold above it this time), we might have reason to get involved here.

Bid Corp (BID)

BID has given us a fake signal here and there over the last few months, although largely our longer-term view on this stock has not changed. BID managed to get above the longer-term moving averages, which is indicative of a bullish trend change. We’d be happy to hold longs here with a stop below R270.

DRD Gold (DRD)

The trend change here is starting to look better and better. We did take a CFD long here and get stopped out at break even in the last few weeks, although the break and close above the previous de Mark or Williams point of resistance might see us taking a new long in the coming week. IF DRD can get above the 200 day moving average, things are going to get really interesting. What we really like about this setup is the interaction with the 89 day moving average. It’s been tested a few times, and finally looks like DRD has broken free of it. We like this stock.

PPC Ltd. (PPC)

Weekly chart.
Well hasn’t this one been the talk of the town? Looking at the weekly chart here, the safest way to play this would be to wait for the (blue) downtrend to be broken. Yes there is a decent rounding bottom there, but remember, things do not move in straight lines. A short-term, against the trend trade could be a break above the 200 week moving average and a run toward the downtrend line. From a Dow Theory / trend perspective though, the trend is down and has shown no signs of turning just yet. The brave longs will be rewarded here… possibly. Just don’t bet the farm.

Old Mutual (OMU)

OMU is looking rather interesting. It’s held the retest of the 200 day moving average and looks to be forming a bull flag price pattern. In a SA Inc. rally situation, we think OMU could do really well. Our view would be to wait for the break of the bull flag before making any moves.

Bidvest (BVT)

Bit a wishy-washy chart on BVT right now. The one thing it has going for it is that it looks like it is managing to put in a trend change. There is no high probability setup in our view, but we would rather be long than short. It is encouraging to see such long tails on the daily candles as it shows that there is interest from buyers. You could take a small long here with a target of R190 and a stop just below R170. It’s not the world’s best setup, but in the context of a strong market next week, it could be a decent trade.

Alibaba Group (BABA)

BABA looks interesting. It’s trading at support that has been a significant level since 2018 and unlike many other tech stocks, BABA makes a huge amount of cash. If you go long here, stop below $190 (to give it some room) and a whole lot of patience for it to get back to the previous highs. This could make an interesting addition to long-term holdings at these levels as well. We like this stock.

Woolworths (WHL)

Weekly chart.
WHL has held its tertiary trend rather well and manage to break above the 200 week moving average. It would not be unreasonable to expect WHL to shoot higher now that it has managed to break, test and hold the 200 week. The last two weeks saw bulls fighting back hard and snapping up whatever they could get in the buying zone. First target R60, second target R70, stop loss R46.

Pan African Resources (PAN)

Weekly chart.
PAN is making a large bull flag by the looks of things. It is also trading in the long-term buying zone and momentum is starting to look bullish. The safest play would be to wait for the flag formation to break and give us a signal, although buying in the shaded green zone (with a stop below R3) will likely prove to be a good entry.

Jubilee Metals Group (JBL)

Solid up trend. Waiting for a chance to buy in the buying zone is probably the wisest course of action. For those who are not in already, perhaps phase in a little now, with a view to buy more if/when JBL gives us a pullback. Those already long… enjoy the ride.

Copper Futures (HG1!)

Weekly chart.
This chart does not really do justice to the rally since the pandemic lows last year. Yes, it is almost straight up, but what is not shown here is that this has pushed to a record high. The question is really just ‘how long will this keep going?’. We do not know the answer to that to be honest. We suspect though, on the back of the post-pandemic recovery narrative, that there is more rally to be had in this.

BHP Billiton (BHP)

As long as the 89 day moving average holds, we think BHP should keep trending higher. As it stands right now, this is about the highest probability entry that we can get for any new long positions in this stock. If the 89 day fails, we’d look to buy again around the R420 level.

Prosus (PRX)

Much the same as NPN above, PRX looks to be offering a very nice long entry.

Alaris Holdings Limited (ALH)

This stock is just too illiquid for us to be able to have any informed technical view on it. It’s not really a stock that we track, but note that it is in the radio frequency (RF) technology sector. This could be an interesting and exciting space over the next decade, so it is worth doing a little bit of homework on.

Randgold & Exploration Company (RNG)

Liquidity… we just hope that you have a good fundamental reason for owning this if you do. This stock is not really on our radar, but we’ll spend some time looking into it. Generally though, we know that it is tempting to buy penny stocks in the search of the mythical ten-bagger, just make sure that if/when you do, you’re not putting too much capital behind it. Best to do some homework though.

MTN (MTN)

MTN is stepping higher nicely. It looks like R110 is on the cards in the short-term.

Mediclinic International (MEI)

MEI is not showing us a high probability setup at the moment, but we’d expect that it trades back to the top of the range. From a longer-term perspective, MEI is trying to establish a base for a new bullish trend. For now though, it’s trading sideways. In our view, the best opportunities are at the top and bottom ends of the range. In no man’s land, there is no trade for us.

Brait SE (BAT)

We like BAT, although it has not played out exactly how we thought it would. Nevertheless, we are happy to hold this for now and think in a year or so from now, accumulating at these prices will be handsomely rewarded. The double bottom only comes into play once the R4.25 is broken. We’re looking at a R6.50 target within the next 18 months.

Exxaro (EXX)

EXX left a pretty big gap… but in context, that was thanks for a massive dividend. Since then the stock has tested the 200 day moving average and looks to be setting up to once again trade towards the R180 level. Any new longs entered here can stop a few Rand below Thursday’s lows with a R180 target.

Telkom (TKG)

TKG gave us a fake short signal not so long ago. Since then though, the R38 level has been holding strong. We think now that TKG is ‘walking the line’ around the uptrend line (purple) and that we could see a decent long entry once it gets above R40.

Spotify (SPOT)

SPOT looks a little oversold here, and also like it has completed an ABC correction move with terminated on a key support zone. This actually offers a very high risk-reward long trade. Well spotted (lol, we got jokes)!

Adobe (ADBE)

A bit of a trendless situation happening here… It looks like momentum is shifting to bullish and we might see a very short-term downtrend break, so a long trade back to $520 might be worth a punt (with a stop below Wednesday’s lows).

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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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