Bigger picture (offshore trade ideas)

S&P 500 (SPY)

The downtrend line has been broken and although the market was not as squeezy’ as we thought it would be last week, it was a rather strong week, nonetheless. The real question now is whether or not this is a real trend change, or if this is a fake breakout and a bull trap? This is also a question that we think cannot yet be answered. For now, we think we are in for another strong week, of course, pending the interest rate decision from the Fed. The market is looking forward to getting some guidance from the Fed regarding the path for interest rates. As usual, it seems that the market is again ‘playing chicken’ with the Fed and betting on a pivot in policy. We think the playbook for next will be ‘strong into the Fed, and weak after’.

Nasdaq (QQQ)

Much the same applies to QQQ as commented above. It is just interesting to see that QQQ has managed to make a new high, which supports the ‘this is the bottom’ thesis of the bulls. Let’s see how this plays out. Just remember, even in the case that this is indeed the bottom, the market never moves in straight line and we are likely to see a pullback in the second half of next week.

Gold

Gold still trading at the top of a rather large and relatively long-term channel. There are signs that momentum is waning. Let’s see how it reacts to U.S. data this week though. There is the Fed obviously, but there is also monthly non-farm payrolls data which is going to be a big one.

Brent Crude Oil

Oil is still trying to stage a bullish break of this downward sloping channel and is still trading in a key support/resistance zone. We are open to the possibility that our channel is not correct, but only once prices breaks down from this zone and back into the channel will we be able to redraw this chart.

U.S. Dollar Index (DXY)

DXY is hanging onto this support level for dear life. It does look like it is basing out here nicely and from a purely charting perspective, looks set to start moving higher once more. A good time to buy Dollars?

USDZAR

The USDZAR chart is sort of in the middle of nowhere for us. We’ve highlighted the possibility of a much stronger ZAR as that trendline support could act as a magnet in the event that DXY (as shown above) breaks below its support level. If that happens, that would be a trigger to short USDZAR to that trendline below. In the event of DXY bouncing off support, it would be safe to go long USDZAR. In essence, there is no clear setup on the USDZAR itself (at least for us) and we will be taking our lead from DXY.

South African trade ideas

JSE Top 40 Index (ALSI)

Go ALSI, go! It looks a little like momentum is running out and a pullback is near. That said, we do not see a clear setup here and thus have no trade on the ALSI until a clear setup presents itself.

Anglo American PLC (AGL)

AGL is still consolidating in this resistance zone. This presents a good risk-reward setup for the patient trader. Wait for the break, in either direction, from this resistance zone and use a trailing stop to maximise the potential of this setup.

Anglo American Platinum (AMS)

AMS is looking good for a long trade. You could draw a small downward sloping trendline on the last month or so’s candles and use a bullish break of that as confirmation for a long entry. Momentum wise it looks good for a move higher though.

AngloGold Ashanti (ANG)

ANG will naturally take its lead from Gold itself, although we think that once price is back to the trendline as indicated, it will present a high probability trade opportunity. Definitely one to keep on the watchlist.

Aspen Pharmacare (APN)

APN is still in this range and is still looking like a medium to longer-term buy for us here. Short-term traders can try to trade the range, but we think the real power here is to buy for the longer-term once this range is broken to the upside.

British American Tobacco (BTI)

R642 needs to hold, else R583 opens up as a downside target.

Clicks Group (CLS)

Not all retailers are equal… CLS opens for a move to R239 after the R265 support is decisively broken.

Coronation Fund Managers (CML)

CML looks like it has made a nice inverted head and shoulders pattern on the daily chart. This presents a decent entry point for medium-to-longer-term traders and investors.

Sasol (SOL)

Very nice and clean break on SOL finally starting to run out of a bit of momentum. SOL will take its lead from Oil next week, so the path forward is not exactly clear. Traders who got long on this trendline break can likely lock in at least some profits here. We still like SOL for the long-term, so we’d be looking to buy if there is any weakness in coming weeks.

Sibanye-Stillwater (SSW)

A bit of a riskier play here on SSW, but we like it for a long from within this support zone. You could put up a downward sloping trend line to act as a confirmation before taking the long trade is you want to be a little more risk averse.

The Foschini Group (TFG)

Not all retailers are equal… TFG looks like a proper short after a break and retest of the support zone. New lows coming?

Vodacom (VOD)

That R120 level is still on the radar on VOD. Friday saw the stock bounce off it rather well. Keep it on the watchlist for a potential play.

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 To squeeze or not to squeeze appeared first on Herenya Capital Advisors.

Offshore trade ideas (bigger picture)

S&P 500 (SPY)

The upper resistance looms, and the market feels like it is running out of a bit of steam. There are now also multiple counts of bearish divergence on this chart, so we are comfortable with our targets lower down. There might be some fight left in this bear market rally yet… but not much in our view. Santa might not come this year.

U.S. Dollar Index (DXY)

Is that the end of the correction on DXY? It looks like it is trying to put in a bottom and get back on the ‘strengthening’ train. It is perhaps important to stress that the support level between 103 and 104 is a very important level that has proven to be significant over a few decades. Thus, we still do think that there is a chance the market might want to go test that support. Should it turn here and not get much closer to support as what it did last week, it seems that new highs on DXY might soon be on the cards.

USDZAR

USDZAR is still on a bit of a make-or-break level here as it thoroughly tests the tertiary trend support. There is some bullish divergence between the stochastic oscillator and price at this point as well. Our thinking is that we see a strong upward push from DXY paired with a solid bounce from the USDZAR. In other words, we aim higher, to a weaker Rand.

S&P 500 Volatility Index (VIX)

This might be a good time to remind you that you need to buy protection when you can, not when you need it. With some luck we could have another week of mildly stronger markets as the SPY tests its down trend line, and the VIX tick down into that 18 to 22 region. This would make a good buying opportunity for VIX calls, striking at 30 with about 6 months to expiry. Santa might not come this year and if he doesn’t, you’re going to wish you had coal (lol, poor Europe) and VIX calls.

Brent Crude Oil

$86 is a very, very important level at this point. The long trade off this level, in our view, is probably a high risk-reward setup that is worth trading. That said, given the overall macroeconomic condition of the world, oil demand is under pressure. We’ve mentioned before that we are stubbornly holding onto our views, but unless oil can hold this level and start to push higher soon, we might have to relook and reconsider our position. For now, we think this is an easy long, but we have to remain flexible and open to the idea that perhaps the party is over. Time will tell.

Deutsche Boerse DAX Index (DAX)

Speaking of Europe, the DAX looks, well, difficult to read. Given our overall view of global markets, we think that it could be a sell (short) around 14800 (if it gets that high). We note some bearish divergence as well. Maybe it has just pushed a little too much too soon? Santa might not come this year and this chart is looking like it will be very disappointed if he does not.

South African trade ideas

JSE Top 40 Index (ALSI)

Well, there weren’t any moves over 4% last week, so we suppose that’s a good thing. The time has come to clear the annotations from this chart and look at it with a fresh perspective. Despite the bearishness in the macro and offshore environment, we are actually rather bullish on the local market. We are seeing more and more bullish setups and also believe that Emerging Markets will outperform the Developed Markets over the next few years. This could be driven by a shift from ‘growth’ to ‘value’ and a mad scramble for commodities and resources. South Africa, believe it or not, is well placed for that type of scenario. There is also a slight backwind of ratings agencies starting to give us the thumbs up again. It’s a confusing time to be honest, and even though Santa might not come this year, we do think that we should not overlook the buying opportunities that will create in our own market. We have been ‘relatively’ stronger, well, perhaps not in USD terms, but there is a great amount of value to be found in our market and being too bearish ‘locals’ might prove unwise.

Anheuser-Busch Inbev (ANH)

And just to cleanse the pallet, we present the short that is not working… Ta-daa! ANH. We may still see this work now that momentum is starting to roll over and it has not really managed to push out of the resistance zone, but we are open to stopping out and running for the hills (again) if it keeps pushing higher.

The Foschini Group (TFG)

This is a weekly chart on TFG, showing a break of support and building downside momentum. Do we see it trade back to the R60 region? Since Santa might not come this year, how many people are going to be lining up for Black Friday specials this coming weekend? Are festive season retail sales going to be strong enough to turn this entire boat around? We think not many, and no.

Sun International (SUI)

Alright, ok, time for some good news. Santa might not be coming, but local tourism surely is. Again, we look at a weekly chart, this time of SUI. We note the flat top triangle breaking to the upside and a continued post-covid recovery in the sector. Remember we’d mentioned that there is much value to be had in South Africa? Well, this is one of those undervalued and overlooked stocks (and sectors) in our view.

ABSA Bank Group (ABG)

Our local banks might be a good place to look for value as well, and ABG has broken a large range and managed to hold above the upper range extreme for some time now. We take this as bullish and think that a long trade here is rather safe.

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 Santa might not come this year appeared first on Herenya Capital Advisors.

Offshore trade ideas (bigger picture)

S&P 500 (SPY)

Although we’ve now seen this tertiary trend line break to the downside, we still think that it is most likely we see the top of the channel before pushing a new low.

Nasdaq (QQQ)

Interesting to see that the tech stocks did not participate in the bounce in the same way that commodities and other ‘hard assets’ did. This fuels our view that commodities and energy still have a lot of upside left, while tech will remain under pressure for some time to come.

All Country World Index (ACWI)

We’ve included the ACWI chart as an indication of how close we are getting to our downside targets. Perhaps hanging onto them (our targets) here is the wrong call, but for now we still think there is more to be had on the downside. Again, this is with the caveat that in the very short-term we do expect the overall market to keep bouncing into the first half of November. Our thinking is that a strong result from the republican camp will be good for markets.

Brent Crude Oil

This large range is in charge on Oil in our view. Not long before we are at the top of it once again. Energy longs are likely to be the best play for the next few months (still).

USDZAR

Stronger markets + stronger commodities = stronger emerging market currencies. This correction seems to be gaining some steam and our sub-R17.50 target remains on the table.

South African trade ideas

JSE Top 40 Index (ALSI)

Friday was an extreme day. For context, we’ve added an ALSI chart from 2020 in which we’ve highlighted some of the largest up (and down) days in recent, well, decades. Friday’s rally shows just how much volatility is king at the moment… From here we could see another 5%+ squeeze, or a 4%+ pullback. It’s really wild out there and we really want to preach caution. It’s been a rough year and just making out the other end will be an achievement. Now, we can hear you saying: “such a big up day, in comparison with March 2020, surely indicates the bottom!” And in truth, that line of reasoning in not wrong. It could well be the bottom. We still think that there is downside to be had in a just generally more volatile regime (after all, volatility is king), but that does not mean we are right. To be clear, our long-term positioning is still around 25% cash / 15% fixed income / 50% equities (with an energy and commodity skew) and we are not looking to change that positioning anytime soon. In the short-term though, it’s been whipsaw city and short-term trading has been really challenging. Patience and resilience are required regardless of which side of the fence you are on at the moment.

ABSA Group (ABG)

The trend is your friend, and surely, it’s looking decent for the banking stocks heading into next week. ABG had a great breakout from a large range and is looking to keep trending higher for the time being. Stop loss below R192.50.

Anglo American PLC (AGL)

AGL, BHP and GLN will soon be the bells of the ball in our view. AGL seems to have broken out of a consolidation pattern but waiting for another day to confirm is probably the wise move here. If China comes back ‘online’ in any meaningful way, commodities are going to fly! So, keep an eye on news from China regarding their Zero Covid policy. Those are most likely to move commodity markets.

Anglo American Platinum (AMS)

We’re just putting this chart up to tell you that we are licking our wounds and very sorry that we ever even tried to short commodities. For real though.

AngloGold Ashanti (ANG)

Breaking the resistance zone, attempt number three! Will it do it this time?

Dis-Chem Pharmacies (DCP)

Make or break support level here. Great high risk-reward entry available on both the long and short trades here. Take your lead from the ALSI before equities open.

FirstRand (FSR)

Decent long setup here with a 1:2 risk-reward.

Glencore (GLN)

GLN got fined for literally flying cash around Africa in private jets to bribe ministers and all the rest. It then looked in its bag of f’s and saw that it had none to give. Up, up and away!

Impala Platinum (IMP)

IMP looks about as good as AGL above. We could be in for a proper breakout here if we can get above resistance.

The Foschini Group (TFG)

TFG is still in the support zone, and we think still likely a good long play. Earnings is coming up though, so odds are that a direction will be chosen once the numbers are known. Patience for now. Maybe best to wait for results before putting on any trades here.

Woolworths (WHL)

We’re probably a bit late to the party here, but a decent bull flag is playing out on WHL here. We’re not going to chase this one, but there might be other bullish setups in the retailers space worth looking out for.

*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 Volatility is king 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.

Sentiment

Below is the Goldman Sachs ‘Sentiment Indicator’ which measures stock positioning across retail, institutional, and foreign investors versus the past 12 months. Readings below -1.0 or above +1.0 indicate extreme positions that are significant in predicting future returns. As we can see, this indicator is currently only very slightly bullish.

Next up is the Bank of America ‘Bull & Bear’ indicator. Once again, it’s in the middle of nowhere. We interpret this as a signal that the market is currently able to sustain more upside without greed becoming too extreme.

Buybacks

The buybacks mentioned earlier is put into perspective by this chart from Goldman Sachs. Just over $1trillion consistently on the bid… More upside coming?

Tapering

It is also worth noting that even with the market mostly expecting tapering to start in November, and interest rate hikes to start mid-next year, the market is not responded negatively. Goldman Sach says “We are pulling forward our forecast for the Fed’s first rate hike by one full year to July 2022, shortly after tapering is scheduled to conclude. We expect a second hike in November 2022 and two hikes per year after that”. Even so, the market remains strong.

Now let’s go through our (mostly) usual charts and see what is out there.

Offshore trade ideas

Philadelphia Semiconductor Index (SOX)

SOX is a bit of a leading indicator to the greater tech stock indices in our view. Although there is not setup to trade here right now, this large flat top triangle has been in the making for a few months. A bullish break here would likely lead the broader market higher.

Nasdaq (QQQ)

Our bearish divergence shown last week was the wrong call. QQQ printed fresh all-time highs and seems to be set on grinding higher. Some tech excitement thanks to Meta might also be a driver here.

Dow Jones Industrial Average (IYY)

IYY is also looking fairly strong. Last week was mostly spent consolidating around new all-time highs and the week ended with the highest ever record close. In the very short term (5 days), this consolidation probably breaks higher.

Russell 2000 (IWM)

This IWM chart is one that our regular readers are probably very familiar with by now. Still not trade here, but still on the radar. This consolidation, at least in our view, will dictate the fate of the wider equity market in the 12 months ahead.

U.S. Dollar Index (DXY)

We’ve included both the daily and weekly chart of DXY here. On the daily we note that our short-term target from our ‘Headed for news highs‘ post was tested. From there DXY bounced hard. Our base expectation here is that DXY will likely rise, or the U.S. Dollar will strengthen, in months to come. Much of this we think will be driven by two forces. 1. Funds flowing into the U.S. Treasuries market as investors will start to seek protection against inflation, and 2. The energy crisis is not nearly as severe in the U.S. as it is in Europe and China, which should give the U.S. economy an advantage during the winter months.

China Coal Futures (CCEX2021)

Longer-term view of Coal Futures in China. It’s been rather volatile (to say the least), but in our view the party is not over. Lots of Chinese coal production was impacted by flooding (about 50 mines) and we are likely in for a cold northern hemisphere winter. We think that (although extremely volatile) weakness here can be bought as coal will likely stay hot (excuse the pun).

Gold

We don’t want to go too much into the commodity commentary here, perhaps a post for another time. But this weekly chart of Gold shows a large symmetrical triangle in the making. Keep it on your watchlist.

Xtrackers Physical Rhodium ETC Fund (XRHO)

We showed the XRHO chart before and show it to you once again. This is a weekly chart, so the timeframes here are slightly longer-term. This chart is working its way into our hearts and might be one of our favourite setups in the market at the moment. You can put on a fairly tight stop and potentially get a decent ride back to the highs.

USDZAR

Daily and weekly charts on USDZAR. On the daily, we have reached the top of the recent range between 15.30 and 14.15. The weekly chart shows us that it is sort of back in the range it was trading before this whole pandemic thing took the world by storm. Perhaps it is reasonable to assume that (unless South Africa shoots itself in the foot) the USDZAR should stay in this range for a few more months?

Bitcoin & Ethereum (BTC & ETH)

We’ve grouped these together this week because they both look rather good. ETH admittely looks a little better that BTC, but we are on track for a new high on both we think. We noticed that some of the larger investment banks started updating targets on these two as well, with Goldman Sachs saying they see ETH going to $8k. Regular readers will know our targets and expectations for year end. Newer readers should have a look at the 2021 roadmap for Bitcoin, Which cryptocurrency to buy in 2021, Stimulus, Gold and Bitcoin and It’s time to buy Bitcoin posts for context. They are older posts, but our views have not really changed.

South African trade ideas

As we mentioned earlier, there is not really much in the local market that looks attractive to us now. So we only have three ideas to share with you this week. Surely there will be some setups to come in future, but for now, perhaps this is a good time to practice discipline.

Woolworths (WHL)

WHL could be a good buy off the 200 day moving average here. Risk on sentiment and strong buying in the U.S. could raise all ships, and local retailers have been underwater for a few months now. Also, Christmas is coming and retailers tend to like them some of that Santa Rally.

The Foschini Group (TFG)

TFG has been consolidating around the 200 day moving average for a while now. It offers a decent, high risk-reward long trade from here. Keep a tight stop though.

Vodacom (VOD)

Maybe this 6 week plus selloff in VOD is a little overdone now? Back in June and July, the zone between the 89 and 200 day moving averages proved to be a good buying zone. Let’s see if the general market agrees this time.

New educational content

We uploaded the JSE Power Hour presentation Petri did earlier this year, although the link in the mailer that went out did not work. So for those who are keen to watch the video and download the slides, please have a look at our Presentations page. You will actually find most of the Presentations that Petri has done over the last fews years, including the slides. It’s a good place to start learning if you are new.

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

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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 Bigger picture 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.

The charts posted below were all done on Sunday, so they do not include Monday’s trading action.

So, deep breath, clear mind. Let’s look at some trades.

Offshore trade ideas

S&P 500 (SPY)

So much fear and loathing of the selloff during the last week, only to end at an all-time record high. The trend truly is your friend.

Russell 2000 (IWM)

The bias is still bullish here. As was the case last week, there is no trade on this index ETF for us until the range is broken.

Nasdaq (QQQ)

QQQ did not manage to make a new high on Friday, although by the looks of the chart, it will likely make a new high in the week.

Dow Jones Industrial Average (IYY)

IYY also made a record high at the close on Friday. It seems that the market is feeling unstoppable at this stage.

Dow Jones Transportation Average (DTX)

DTX did not bounce off the trend line as we anticipated. It did make an inside day candle formation on Friday though. Given the context of strong markets above, our bias here is bullish. Even though the trend line has broken, we think it might be a fake break out. Time will tell.

U.S. Dollar Index (DXY)

DXY put in a decent reversal on Thursday and Friday last week. Perhaps we see a pullback to the $91.50 zone before the bulls take charge again?

USDZAR

The R14.50 level has been rock solid. We’d like to say that we could see a stronger ZAR from here, although given the events of the weekend, we’re not so optimistic.

Gold

Looking at a weekly chart on Gold. Gold has broken it’s weekly downtrend and seems to have successfully tested and bounced off the previous resistance. Dare we say that we are bullish Gold here? Also, inflation is not transitory.

Brent Crude Oil

We look at both the daily and weekly charts here.
On the daily chart Oil is looking rather bullish and likely to keep pushing to make a new high. On the weekly chart though, we see a hanging man candle formation. This could lead to a pullback similar to the one shown in the first green circle on the daily chart. Thus, for the week ahead we have no play on Oil. We do think that weakness is worth buying into though.

VanEck Vectors Gold Miners ETF (GDX)

Nice buying opportunity on GDX here in our book. Clear stop loss with the potential to catch the start of a medium-term trend here.

Wells Fargo (WFC)

WFC setting up for a nice bullish break out by the looks of it. Depending on your risk tolerance, it may be wise to wait for a confirmed break out before entering a long trade.

Energy Select Sector SPDR Fund (XLE)

XLE giving a nice opportunity to get long in the ‘buying zone’. More conservative traders can wait for a confirmed break out from the short-term downtrend.

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South African trade ideas

Aspen Pharmacare (APN)

APN once again closed above the R168 level, which triggers a long trade with an eye on R185 as a target price. Be mindful though, last time this was a fake break so keep a tight stop loss.

Coronation Fund Managers (CML)

CML setting up really nicely for a push to a new high. The first stop should be gap close, then if it can get above R52, we might be looking at a new high.

Discovery (DSY)

DSY is being a little tricky, although as long as the R120 level holds, we remain bullish. For the range trade to R150, we think DSY offers a great risk-reward.

Truworths (TRU)

This is a technical breakout on TRU… but this also the wild west, so who knows what happens. We are already long here, so we will not be taking another position in this stock.

ABSA Group (ABG)

ABG setup shown a while ago seems to be working out rather well.

Bidvest (BVT)

BVT seems to be setting up for another trend following move, this time aiming above R200.

Gold Fields (GFI)

More ‘hopium’ for the gold bugs. This does look like a decent level to be long from.

MTN (MTN)

What? Someone is in trouble in Nigeria and it’s not MTN? Bullish!
In all seriousness, this looks like a clean trend following break higher.

Nedbank (NED)

No trigger yet, but worth watching this range for a break out.

The Foschini Group (TFG)

TFG looking similar to NED. Again, no trigger just yet, but something worth keeping on the radar.

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 Focus on the charts appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P500 (SPY)

The rising wedge formation is starting to look more and more ominous. A break below both the 50 day moving average and the trend line support, could see SPY testing the 200 day moving average around $345.00.

Nasdaq (QQQ)

By the look of things, QQQ has broken the bullish channel is has been trading in since the bottom of the “COVID-crash”. It has now taken out the 50 day moving average as well as a significant trend line. Support comes in at $280.00.

Dow Jones Industrial Average (IYY)

It seems that the second target will not be reached in this move after all. IYY has also come down to test its 50 day moving average and a break below will open a move toward $86.00.

Russell 2000 (IWM)

Small caps have been outperforming larger caps for a solid four months, although it seems that the party has finally come to an end. The tertiary trend line has been broken. Although the 50 day moving average has not yet been tested, the secondary trend line has now become a target.

Volatility Index (VIX)

The VIX failed to break below 20. Over the last year or so, each time the VIX has bounced off the 20 level, it traded to resistance around the 40 level. A move towards 40 in the coming weeks would likely mean a move lower on most equity markets.

Dollar Index (DXY)

Looks like the DXY had a fake break lower last week. It failed to make a new low below $89.00 and popped right back above the 50 day moving average. This puts the falling wedge formation squarely back on the table with the 200 day moving average is the first target. Much of the weakness we saw in Gold on Friday was likely driven by the sharp move the DXY made on the same day. A further push of Dollar strength will continue to put pressure on the Gold price. From a momentum perspective, it seems that the DXY is becoming more bullish.

USDZAR

A stronger Dollar spells a weaker ZAR. Keep an eye on that strong resistance (trend) line though. Once that down trend is cracked, we could see a fast move up to R16.16.

Bitcoin (BTC)

Well, hat sure is tasty…nom, nom, nom. Last week I was looking for higher crypto prices in general, although a decent spell of “risk-off” ruined the party. Leaning on historic performance, and based on the assumption that we are in fact in the fourth (or parabolic) year of the halving cycle, we’ve seen that during the parabolic years BTC can easily make 40% corrections. Thus, considering that “risk-off” is likely going to get a little wild next week, a 40% correction in BTC could see BTC scrambling for support around $35k. Overall my view has not changed and nor has my end of year target of $200k. In the short-term though, things could get a little bumpy.

Brent Crude Oil

Oil has had a very good run, although it is starting to look like a pullback is due. Over the medium-term I still believe that we will see strong oil prices, but in the short-term it is due a correction.

iShares 20 Plus Year Treasury Bond ETF (TLT)

TLT has put in a strong bounce. Should this bounce keep up and TLT test its 50 day moving average, we could see a relief rally in Gold.

International Gold ideas

Gold

The key support was broken in a big way on Friday. The next “big” support level comes in around $1680.00. From a trend perspective though, the 50 and 200 day moving averages have formed a “death cross”. Momentum wise things are not looking good either. Further, should the DXY rally, Gold will come under pressure. If the Bond Yields come down again, we might see Gold bounce a little, although overall, for those trading Gold on the long side, it is not looking very good at all. The most probable scenario for me here is that we see Gold test the support at $1680.00 before we see a bounce.

Gold Fields (GFI)

The break is clear. Look out below! Full target here is $5.00.

Barrick Gold Corp. (GOLD)

This stock has come off very hard over the last two weeks. It might be a little overdone here, although from the look of things, we likely won’t see a bounce before the $16.00 level is tested. There could be a good counter-trend trade here, although we’ll have to wait for a small consolidation or a reversal pattern of sorts before we can get involved.

Newmont Corporation (NEM)

NEM is the world’s largest gold miner and if those support levels break, it could be in the world’s largest trouble. $54.00 has been a support level in the past though, so let’s not get too excited too fast. We need to wait for the break below the key support (zone) before we can rush into any new short positions.

VanEck Vectors Gold Miners ETF (GDX)

There are two ways in which this can play out, and perhaps this chart does a better job at communicating the current view on Gold in general. Much depends on Bond Yields and Dollar strength. We could see a brief relief rally come in a drive GDX up toward the down trend line before the next leg lower (green path). The more likely outcome is that GDX follows the orange path. This would simply mean that when markets open, the support breaks and GDX keeps trading lower.

VanEck Vectors Junior Gold Miners ETF (GDXJ)

As above, things are not looking good for the Junior Gold miners either. Death cross, bearish momentum, break of key support… it looks like this ETF is about to fall off a cliff.

DRDGOLD (DRD)

DRD is looking pretty bad. There is some support around $8.00. After that the next major level is $6.00.

AngloGold Ashanti (AU)

Very clear break of the previous low price. Simple trend following dictates that price is headed lower. Much the same as the rest of the Gold stocks, the momentum oscillators are all triggering sell signals as well. This is a very nice short setups with a really tight stop loss and high risk-reward ratio.

Agnico Eagle Mines Limited (AEM)

AEM is looking very oversold, although we know that a stock can remain oversold for long periods at a time before they bounce. If the $55.00 level breaks, it opens a $45 price target.

South African trade ideas

Top 40 Index (ALSI)

It seems that the trend might be running out of a bit of steam. All eyes on the tertiary trend line. If that trend line breaks, we could see the ALSI pull back to the 200 day moving average in the coming weeks.

Netcare (NTC)

NTC could be offering a really nice, high risk-reward long entry here. Be careful though, because if it breaks below R13.50, odds are that it’s going to have another go at the R12.00 level.

Shoprite Holdings (SHP)

Be patient here. Waiting for a potential long around the R125.00 level is the current game plan.

The Foschini Group (TFG)

The trend line has broken, which triggers a short trade to the 200 day moving average. A short trade here is against the trend, so keep a tight stop loss.

Truworths (TRU)

TRU is battling to get through the resistance at R50.20. This offers a high risk-reward short trade down to support around R30.00.

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.

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