The market is going through a volatile period, seesawing between conflicting news headlines and multiple shifts in sentiment on a daily basis, seeming increasingly like the norm. One may wonder how the experts view the situation, and while it’s impossible to give a definitive answer to the question, here’s an expert’s viewpoint on a few topics.

Commodities

Since the beginning of the conflict in the Middle East, we’ve been seeing a pattern of weakening commodities, which also coincides with the U.S. dollar growing stronger. This comes as a result of priorities being shifted towards risk aversion, which tends to make U.S. Treasury bonds and equities a more attractive investment. This risk aversion is in part due to conflicting headlines regarding the conflict, where headlines of de-escalation are followed up with news of escalation, often within the same day, which makes it nigh impossible to predict the market’s short to mid-term trajectory.

Opportunities

As the market increasingly slows down, in favour of going into a wait-and-see stance, it might seem like a good idea to buy quality shares at a discount rate. And you’d be correct! However, it’s important to note that most investors prefer to play it safe at the moment, and would rather wait and collect interest on their money than commit without clarity.

Telkom (TKG)

We see Telkom as an example of a quality share. In the last decade, we’ve seen Telkom turn its fortunes with new leadership, structure and business model. With their ongoing modernisation efforts, and recent trading statement in mind, we believe that the company has legitimate momentum to continue growing from here.

Reinet (RNI)

Reinet, Johann Rupert’s investing company, dropped by 10% today following the sale of several assets, without investing the cash anywhere else. While it’s normal to see a drop in share prices, when an investing company sits on a large pile of cash with no clear goal, we see the magnitude of the drop as an overreaction by the market.

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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 Commodities, Dollars, Telkom And Reinet (27/05/2026) appeared first on Herenya Capital Advisors.

For the last few weeks we’ve harped on about ‘it not needing to make sense, we just follow the market’, but over the last week it seems that the ‘follow through’ is not there. In other words, the market is starting to feel the need to make sense again, which makes us a little bearish. There are still many signs that point to a slowdown/recession in the second half of the year and more and more signs pointing to a looming credit crisis/crunch. Canada put up interest rates unexpectedly, U.S. student loans are once again becoming payable (aka. households have had a reprieve from making payments on student loans and that reprieve is now over, so payments are once again due). Overall, the economic grounds are shakier than what Joburg was a 02:40 on Sunday morning.

Bigger picture (offshore trade ideas)

S&P 500 (SPY)

So, the 4300 level ($430 on SPY) put up a good fight and won. Our horizontal resistance level is marked out at $429.50, although we know that these support and resistance levels are more zones than absolute levels. Thus, the attempted break higher that failed on Friday is rather significant in our view. Momentum is looking a little stretched too. In the bigger picture, we have the making of a longer-term trend change here (from bearish to bullish), but in the short-term, we think that the market is very likely to come down and test the 4200 level ($420 on SPY) again. There is a metric ton of economic data due out next week, so it is a bit of a wildcard week, but from where we sit, it doesn’t look like there is going to be much good data coming out. Thus, we expect the market to be softer in the week to come. As always, we would be happy to be wrong in this regard, but the start of the week might prove a good time to bank some profits on local (South African) long trades that have worked out.

Nasdaq (QQQ)

There is not too much to add to QQQ that was not said above. Although, we do feel that we should stress that Tech has had an amazing run on the back of all this A.I. mania. We’d said a few times over the last week that we think the A.I. bubble is only just beginning, and we still believe so, but some of these tech stocks (NVDA for example) have gone a little far and are due for a pullback in our view. We also see waning momentum in QQQ and a failure to make a new high. Brace for some downside we think.

Gold

We won’t reiterate our downside (range) target for gold every week as it is a multi-month, potentially multi-year setup. That said, we have to wonder if we might not see gold pop a little on the back of weaker equities in general..? Overall, we are still bearish here. It would not be crazy to imagine gold coming down while equities are coming down, specially on the back of bad economic data and some fresh panic. Let’s see how the week goes.

U.S. Dollar Index (DXY)

It’s looking more and more like DXY will test the 101 level. The surprise BOC move (hiking interest rates in Canada) contributed to some USD weakness. Bad economic data in the week ahead will likely add fuel to that fire.

Brent Crude Oil

The Saudis have just about thrown every kitchen fitting at the oil price to get it to go higher and still it won’t budge. This makes us worry a little. If that $70.50 level breaks, $60 might be on the cards. Slowing global growth (aka. recession) and persistent inflation will likely keep putting the breaks on oil prices. We can no longer be bullish here under the current circumstances.

USDZAR

We asked for reprieve and we got reprieve, in a big way! Time for that Kansas City Shuffle though. We’re happy to take some speculative longs around R18.60. Keep a tight stop though.

S&P 500 Volatility Index (VIX)

VIX sub 10 lows would mean that things are ‘back to normal’. While we think that this will likely be the case rather soon, with a doji candle and all the long stories about headwinds we’ve already told above, a test of 16 or 18, or even 20 in the week ahead is likely more probable.

South African trade ideas

JSE Top 40 Index (ALSI)

We’re looking at a weekly chart here on the ALSI. To us it looks like the momentum has started running out and that a move to be bottom of the upwards sloping channel is the most likely move from here. We know that CFR has had a huge impact and that will be no more, so maybe the ALSI comes back down to earth a little.

AngloGold Ashanti (ANG)

Well would you look at that? If it isn’t a beautiful head and shoulders pattern with a target at the primary trendline? It’s makes sense though. Gold is looking wabbly, the Rand has gotten a huge amount stronger. The party is over here for how. ANG is probably worth a buy sub-R400, but for now we think that there is around 20% worth of downside to come.

British American Tobacco (BTI)

We’re just updating the BTI chart here and reiterating our R584 target price.

Aspen Pharmacare (APN)

APN bounced a little, but momentum ran out pretty quickly. Maybe it’s time for the Kansas City Shuffle here too? We’d take the money off the table from the long trade here and run.

Bidvest (BVT)

BVT finally breaking the flag and putting in a good run. As is the case with APN above though, maybe it’s time to go left while everyone is going right? Take the money and run, in other words.

Compagnie Financiere Richemont (CFR)

Look out below! Well, ok, it’s not that simple. Yes, this chart is looking terrible and yes, there is a ton of selling that needs to be done in order to get index trackers inline with the rebalancing. But, and a big but, CFR is one of the most shorted stocks (in proportion to market capitalization) on the JSE at the moment. Everyone is thinking that this is the easy trade, and look, it probably is, but when it squeezes, which it eventually will, it is going to hurt the overleveraged shorts in ways that they will remember for many years. We do still like the short though.

FirstRand (FSR)

What a move from FSR! ‘Locals’ have done really well, and there are lots of arguments why they are all undervalued and why South Africa is ripe of the picking (aka. buy local stocks over offshore), but again with buts, FSR has slammed head on into the R68 resistance level. We could add a support level at R60 here and it would not be completely unreasonable to think that FSR will come back to test it.

Gold Fields (GFI)

Many years ago I (Petri) worked at a small hedge fund in Cape Town, and there my old boss taught me one of his favourite setups. He called it ‘The Eye of Sauron’. Basically, a failure to make a new high very shortly after a pullback at the top of long upward move. Almost a double top, but weaker. Now, The Eye of Sauron sits atop the GFI daily chart, and it looks down at the primary trendline with malice. And it broods. This is going to be a great short trade actually.

Naspers (NPN)

NPN has been pretty range bound, with the odd fake break out the bottom. We have this feeling that the next break out the bottom will not be fake though. R2785, then R2330. The lower target is less likely, but R2785 we think is rather probable indeed.

Sanlam (SLM)

SLM has also had a great run (see FSR comments) and has also slammed into resistance (at R59). For now, we think this party is over and we will be seeing the R51 support fairly soon. Great risk-reward here too, with a super tight stop and almost R8 on offer. A daily close above R60 takes you out of the short and an intraday high above say R61 does the same. Remember though, there are stop hunters out there who will squeeze you to take your money, so trade small(ish).

Sasol (SOL)

SOL forming a nice little base here and longs from last week worked out rather well. Given the oil and general macro narrative above, we think maybe its time to pack this one in for now. Well, for short-term traders at least. For the longer-term investors, SOL is likely still a good hold.

Sibanye-Stillwater (SSW)

SSW is looking for that R31.80 level with a sore heart.

Telkom (TKG)

So… TKG rejected an offer for R46, because it is not enough. Word is that the ‘buyers’ are still sitting around the negotiating table. It smells like TKG pops in here.

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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 Kansas City Shuffle appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 (SPY)

Well then… it looked for a short while that the week would end on a high note, but alas, for the Russians came to spoil the party and close markets on the lows. I’m not going to lie, this market looks toast! I’ve been saying this for some time now to be honest, so this is not new messaging from me. Sure, the market does not move in straight lines and sometimes you get caught on the wrong side of a move because you were either early or just plain wrong, but from where I sit, I think this market is going to head a lot lower. Remember that 3380-ish on the S&P 500 Index is the pre-covid high, so going back to test that is rather probable in my view. The real question is: does the pull-back stop at 3380, or are we in for a proper recession here?

Nasdaq (QQQ)

I guess this reads the same as above… pre-covid highs is now support and acting like a magnet for QQQ.

Philadelphia Semiconductor Index (SOX)

SOX also looking pretty smoked to be honest. I’ve highlighted the pre-covid highs here too.

Deutsche Boerse DAX Index (DAX)

DAX is on a very important level here. If it fails here, we could see it trade all the way down to the covid-lows. Honestly, given the energy situation in Europe (Russia turning off the gas again) and how dependant German manufacturing is on, now inaccessible, energy from Russia… it is hard to imagine a scenario where Germany escapes a bad recession. Make no mistake, this is an energy crisis and the impact on the German, European and Global economies should not be underestimated. Also, this chart offers a decent risk-reward on the short here. It’s going to be a cold winter in Europe.

U.S. Dollar Index (DXY)

No real new comments on DXY, other than a general update and one of these. Overall, the message DXY is sending is clear. Get out of Europe and into safety. The problem is, the stronger the Dollar gets, the fewer places there are to hide.

USDZAR

I use a weekly chart here to illustrate the power of trends. Some are calling for the ZAR to trade back to ‘fair value’ around R15. Truth be told, I don’t see that happening in the short-term. For now the trend is too strong to fight. I think the petrol price cut coming this week is going to be rather short-lived. Enjoy it while you can I suppose.

Gold

Gold is once again near the channel low and probably worth taking an interest in. In truth, I am not sure why Gold has not run ultra-hard on the back of all the ‘risky’ happenings around the world. Maybe Gold is just being a bit of a late bloomer?

Brent Crude Oil

Oil is holding on for dear life here, but even I have to admit that this trend is starting to look a little fragile. There is no doubt that a global recession scenario is going to be bad for oil demand, so there is a strong argument to be made for lower oil prices. That said, I think we are likely to see some production cuts from OPEC+, so for now I am hanging on here and saying that buying off this trend line with a fairly tight stop is the play. Although, be warned, if no cut comes from OPEC+, this trend line might just crack, and we could see oil come off a bunch. It’s probably better (if you have no position currently) to wait for OPEC+ before taking any trades here.

South African trade ideas

JSE Top 40 Index (ALSI)

Well, Friday was nice and cheery, but I am not sure that Monday will be. The downside target is still 53k. Trail your stop losses.

Quilter (QLT)

Rumours of a buy-out, support on an important level. Seems we have a very high risk-reward setup here for a long trade.

Naspers (NPN)

NPN once again flirting with death. We have already seen once before how significant this R2350 support zone is and again NPN is testing it repeatedly. If this level breaks to the downside (again), I think NPN is going to test the lows (again). Let’s see though, no point in pre-empting it.

Thungela Resources (TGA)

I don’t want to be ‘that guy’, but the energy situation isn’t exactly getting much easier in Europe and TGA is rather well positioned to make some (more) profit from selling coal. That, and a decent bullish reversal candle pattern. Maybe we push even higher than what anyone thinks is possible? In my experience, that’s generally how markets work.

Blue Label Telecoms (BLU)

We pointed out the BLU short last week. Trailing stop losses from here.

Mediclinic International (MEI)

MEI stock has been doing really well, and for good reason too. Although, once again I get that ‘gravity is calling’ feeling. MEI has put in a decent range between R90 and R100. A downside break of that range (sub-R90) might see a rather wild correction. Something to keep on the radar I think.

Steinhoff International (SNH)

SNH is dying… I thought that it stood a chance if this trend line held, but alas! The trend line did not hold and given the overall market mood, without a clear, loud new catalyst, I must abandon hope for SNH.

Sasol (SOL)

Similar to Brent Crude Oil, SOL is flirting with death. Watch the trend line on Oil and watch the R320 level on SOL. Below there (on both) and things get messy. If Oil bounces off its trend line and SOL can get through R365 to the upside the good days will be here again. Well, maybe not for basically everyone at the petrol pump, but good for SOL shareholders at least.

Telkom (TKG)

Bull flag looking like it might be almost ready to break, plus the buy-out story… I think TKG pulls one of these.

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

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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 resource

The post Welcome to winter 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.

We are all guilty of overcomplicating trading. Often we have to remind ourselves that most of the work is done by the market and that trend following is often the easiest way to interact with markets. This week we look at a few of the better trend following ideas we have for the week ahead.

Offshore trade ideas

S&P 500 (SPY)

Buy-the-dippers win again! SPY bounced well from the buying zone last week and has gone on to make a new all time record high. As long as the FED keeps the printers going brrrr, it’s going to be rather difficult to break this trend.

Dow Jones Industrial Average (IYY)

We don’t really have too much to add in terms of commentary on IYY. As is the case with SPY, the trend is strong and the index is trading at an all time record high.

U.S. Dollar Index (DXY)

Looking at a weekly chart here on the DXY as it helps create a bit more context. Over the last five or so years, the DXY has been range bound between the $89 level and the $100 level. It is still a bit early to tell, but it looks like DXY has formed a double bottom around the $90 zone during the last 6 months or so. It would need to breach and close above the $93.50 level to confirm the double bottom. Once confirmed though, it looks highly probable that the DXY moves back up toward the $100 level in the months to come (so let’s say, over the medium-term). Naturally that would lead to a weaker ZAR locally, but it would also be supportive of commodity prices in general.

USDZAR

The downtrend line has been broken and the USDZAR has spend some time above it. That puts the USDZAR in potential trend change territory in the medium-term. Considering the outlook on DXY above, that medium-term trend change is starting to look very likely. The USDZAR would need to get above R14.52 in order to have us take long positions on this currency pair.

Brent Crude Oil

A weekly close above the de Mark or Williams point of resistance. $86.71 here we come! It might take a few weeks though. Energy prices seem to still be a one way bet though.

Bitcoin (BTC)

All has not been so well in crypto-land over the last few weeks. BTC is desperately trying to hold this support level, and rightly so. The world and its uncle is seeing the Head and Shoulders formation on the daily chart… which makes us think that it will likely fail and BTC will see higher prices in the second half of the year. Time will tell. We remain bullish.

South African trade ideas

ABSA Group (ABG)

ABG offering a nice trend following entry here. Perhaps the perfect time to enter was mid-last-week, although the trend seems to be fairly well established and we think that entering a long here would be a rather safe play.

Aspen Pharmacare (APN)

The much anticipated breakout of the horizontal resistance failed. Now though, APN has pulled back into the buying zone for trend following traders. A small long entry here with a volatility based trailing stop loss is the order of the day.

Bidvest (BVT)

The small range on BVT might provide a good long entry if it is broken toward the upside. Momentum wise it is still a bit early to get a clear read, but from a trend following perspective, it might be worth getting involved in next week’s action is bullish.

Coronation Fund Managers (CML)

CML looks like a great long entry off the 200 day moving average. Momentum is turning up, the 200 day moving average held well, and overall markets are looking healthy and confident. Keep in mind that CML’s earnings will be highly correlated to global market performance (with a skew towards local markets, but in general, if markets do well, so do large asset managers).

Capitec (CPI)

CPI has for a very long time been the best performing bank on the JSE. So while the market is strong, it makes sense to be involved in one of the strongest shares. It’s not shown on the chart, but CPI has broken a small bull flag. Our thinking is that this stock could get to R1800 in the next two or three weeks.

Netcare (NTC)

Another fake bullish break in glorious fashion. NTC does look interesting around the 200 day moving average though. The thinking here is that we see a medium-term trend change and that NTC should trend higher over the next 12 to 36 months. A long entry here could play out well in time.

Remgro (REM)

REM has been on our radar for some time, with a similar medium-to-longer-term trend change play as with NTC above. REM has done a better job at establishing a its uptrend than many other stocks. Now it is offering a decent trend following entry as the stock is hugging the top of the buying zone. Again, a volatility based stop loss and a small trend following entry is the play here.

Telkom (TKG)

Some time ago we mentioned that it would be great to be able to pick up some TKG nearer to the trend line. As and you shall receive it seems. We happy to get into a trend following long trade 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

*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 Trend following for the win! appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 (SPY)

The trend is very strong here, despite all the panic and noise out there. We’ve seen that the zone between the 50 and 89 day moving averages has proven to be a good ‘buying zone’ over the last year or so. Given that the FED is going to keep the easy money money flowing (low interest rates and bond buying), we think that this is a ‘buy the dip’ situation.

Russell 2000 (IWM)

Small caps (IWM) are a little messier than SPY, but a chance to buy (the dip) off the trend line would be welcomed.

Nasdaq (QQQ)

Nothing can keep the tech stocks down it seems. Once the market shakes off the reality that ‘at some point’ the FED will stop giving it free money, odds are good that QQQ will just keep pushing higher. The trend looks strong, the index (ETF) is trading ver near highs. Some ‘risk-on’ in the week ahead should see QQQ leading the pack on the way up.

Dow Jones Industrial Average (IYY)

Our commentary on IYY is very much in line with that of SPY. The trend is strong. Buy the dip.

Gold

After the FOMC minutes on Wednesday, Gold took the elevator down. Perhaps the inflation narrative lost some footing, but we believe that in the medium-term it will rear its head once more. Our thinking is that Gold could be a decent buy off the support at $1680 (if it gets there).

Platinum

Ouch! Platinum lost the $1140 support level in glorious fashion. Once again we think that buying around support could be a good medium-term entry. The world is starting to emerge from COVID, the use-case for both Platinum and Palladium in cleaning combustion engine emissions has not changes, nor has the supply side dynamics. Buy the dip.

Palladium

Palladium also felt the smack pretty hard. Our thoughts here are similar to those on Gold and Platinum. We think that weakness (hopefully a little more) is a good opportunity to get entries into strong trends.

Brent Crude Oil

Talking about fundamentals not really changing; Oil is very firmly in an uptrend and as is the case with catalytic converters, there are some persistent supply side constraints in the oil market that have not gone away over the last year. We are still bullish oil in the medium-term. Buy the dip… if there is one.

U.S. Dollar Index (DXY)

Alright, so $92 target was reached. Now we wait for a little while to see if it can get above $93.50 and confirm the double bottom. From the look of things though, Dollar strength is likely going to become a rather important market theme.

USDZAR

Well, well, well. The USDZAR reversed off the ‘Historic large range’ support and also managed to break the ‘Strong resistance’ trend line. Does this mark a turn of fortunes for the Rand? We think it might just. The key level to watch here is R14.50. If the USDZAR breaks that level (likely dependant on the DXY and whether or not it keeps pushing higher), we could see a move back to the upper end of the ‘Historic large range’ at R15.50.

Bitcoin (BTC)

It seems for now that the $35k support level/zone is once again holding. Until we see a clear break of that level, we remain bullish.

Ethereum (ETH)

ETH is also managing to hold support. As long as the support holds on a weekly basis, we are happy to remain long.

South African trade ideas

JSE Top 40 Index (ALSI)

Over the last few months, every time the ALSI traded in the green support zone, it has proven to be a good buying opportunity. Buying this level provides a good risk-reward trade, with a tight stop loss and a fair amount of upside. Perhaps the brave will be rewarded once more?

BHP Billiton (BHP)

The Head and Shoulders formation on BHP is looking rather tempting for a short trade. The risk-reward ratio on this trade is still very good. Well, if you use the top of the right shoulder as your stop loss, then risk-reward is close to 1:1, which is not that good. If you use the R425 as a stop though, then your risk-reward ratio is closer to 1:4. This is a very tempting trade, but not one that we will be getting involved in, at least until we can discern if last weeks’ madness was just a knee-jerk reaction from the market about FOMC minutes, or if we are going to see some prolonged downside in equity markets in general.

British American Tobacco (BTI)

Not much to do but wait for the trade to play out. Stop losses can be moved to be in-the-money.

DRD Gold (DRD)

DRD smashed through the support level, but held teh 89 day moving average. For now, we’re running for the hills on this one.

Discovery Limited (DSY)

R125 – R130 has been a solid support zone for DSY for about half a year now. Perhaps a move back to the R150 level from here? It is a little concerning that the 200 day moving average was broken, although we think the support zone is a little more significant than the moving average at this stage.

Mediclinic International (MEI)

The healthcare stocks mostly pulled back into their ranges, which takes the longs off the table for now. It’d be interesting to see if support comes in for MEI around R60, or if it breaks through there and finds support on R54. For now, we are sitting on our hands.

Mondi PLC (MNP)

Aaah, the good old ‘break out then die!’ formation. Our MNP trade has stopped out. We’ll keep an eye on it for a potential bullish reversal under the 200 day moving average though.

Old Mutual (OMU)

With some luck, we might see OMU at the bottom of the range (and at the 200 day moving average) again. We think it will make a good buy around R12.30.

Remgro (REM)

Buy orders waiting in the zone between the 50 and 89 day moving averages for a longer-term trend following entry.

Sanlam (SLM)

Another fake-out from a range. We still favour SLM for a longer-term position, although perhaps we’ll get a better chance lower down for an entry?

Sasol (SOL)

If all this ESG and Secunda pollution stuff can get it down to R180, we think its a strong buy.

Telkom (TKG)

If TKG could get back down to the trend line, we think it could be a good buying opportunity.

Truworths (TRU)

Our TRU trade is on the verge of being stopped out. Perhaps TRU tests the R51 level?

Vodacom (VOD)

VOD is still range bound and is looking like a fairly safe short back to the R120 zone.

We keep the best for our clients

We give our clients many more ideas and insights than what we put out on our blog. Move your account to Herenya and join our community of actively trading clients.

*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 Buy the dip 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).

We keep the best for our clients

We give our clients many more ideas and insights than what we put out on our blog. Move your account to Herenya and join our community of actively trading clients.

*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 Twitter chart requests appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P500 (SPY)

It looks like there is a bit of a rising wedge forming on SPY. As things stand now, there is no trade setup here just yet. Some patience needed, but it is worth watching in order to see how this wedge plays out. Ultimately, the SPY is still in its large channel and until that channel is broken, the up trend remains intact. Although there is no trading signal here, some caution is advised and from our perspective, the risk is skewed toward that downside.

Nasdaq (QQQ)

As is the case with the SPY above, the trend on QQQ is still firmly up. That said, momentum oscillators are indicating that bullishness is starting to wane. Again, patience needed. There is no real reason to get into a trade on this index and some caution of taking new longs in tech stocks is advised.

Russell 2000 (IWM)

IWM does look a little more bullish than the other major U.S. indices, although here too momentum is somewhat directionless. Our eyes are on the red trendline for two reasons; 1. it appears to have bounced off the trendline and might provide a decent entry for a long trade to a new high and, 2. should that red trendline break, it opens up for a very high risk-reward short trade. Our bias is toward the downside and thus will likely not participate in long trades on this index from here.

Gold

Well there you have it… a death cross on Gold. Now the question is; did Gold make a double bottom around $1765? From a momentum perspective, it doesn’t seem that way. A break and daily close below the $1765 level would indicate further downside. Should the support fail, $1680 becomes a possible price target. Conversely, should the support hold and Gold manage to break above $1800, the double bottom long trade comes into play.

Brent Crude Oil

Looking at a weekly chart, it appears that Oil is in the process of making a shooting star candle formation. Oil has run very hard and can put in a decent pullback, without nullifying the current uptrend. This candle formation on the weekly Oil chart has been very reliable as a short-term reversal signal in the past as well. Perhaps we’ll see Oil dip below the 200 day moving average before resuming the uptrend?

Dollar Index (DXY)

The falling wedge (and Inverse Head and Shoulders) that we’ve been tracking is starting to look more and more like it is going to fail. Momentum is starting to turn bearish again and the DXY can’t seem to get clear of the 50 day moving average. Both the MACD and Stochastic oscillators have generated sell signals, thus, should the green trendline break, it would seem that there is more USD weakness on the cards.

USDZAR

That R14.50 level is still holding strong. The trend is still down though and should the DXY (above) break lower, it’s rather likely that we see the USDZAR below R14.50 in the coming weeks.

Ethereum

ETH is not rallying as hard as BTC, although the previous all time high was taken out two weeks ago and it looks set to keep trading higher. Should there be a correction or pullback to $1420, that could be a great opportunity to buy ETH. Generally we see cryptos rallying for four to seven weeks, with consolidations (or corrections) lasting between three to five weeks during these parabolic years. Thus, there is no sense in chasing it, even if it does trade to $2400 in the next two weeks. Rather wait for a correction and a high probability setup, or look on lower time frames for opportunities to get in. ETH is lagging BTC for now, but eventually will catch up.

Bitcoin (BTC)

BTC is leading the charge for crypto’s. Talk of BTC being a viable alternative to Gold is starting to circulate, large corporates are starting to buy BTC to hold it on their balance sheets, regulators are starting to think more carefully about how to class crypto’s and what their place in the financial system is… the mass hysteria is beginning. $68k by the end of the week? Just remember, don’t take massive risk. Treat it like a normal stock and make sure that you have a risk management plan.

South African trade ideas

Anheuser-Busch Inbev (ANH)

High risk little long trade on the table here. The risk reward is almost 1:4. The idea is that the trade either works almost immediately, or not at all. We have some buy signals lining up on both the MACD and Stochastic oscillators, as well as a short-term trendline break. An ATRx2 trailing stop loss would likely work best here.

Aspen Pharmacare (APN)

The APN bull flag was broken and retested. Nothing really to do on this trade other than stick to the stop losses and wait for the trade to work out. Once APN gets above R150, an ATRx2 trailing stop loss would likely be the best way to minimise risk on this trade.

BID Corporation (BID)

This is the same short trade idea as last week. The stop loss remains at R300 with the price target at R240.

Bidvest (BVT)

BVT has formed a large rectangular consolidation above the 200 day moving average. In the very short-term, it seems as though BVT is setting up for a move back to the bottom of the consolidation. This presents two high risk-reward opportunities. The first is a short trade back to around R150 with a stop loss above R180. The second would be a long trade on a break above the upper resistance of the green rectangle, although by the look of the long wicks of the candles in the zone, we think it unlikely that we see a break higher in the next few weeks. Thus, our bias is short.

GoldFields (GFI)

This Head and Shoulders formation is ominous. There are some support levels marked out in blue, which together make a zone of support. Should that zone of support fail and price get and hold below R117.50, price targets as low as R60 come into play. A stronger ZAR and weaker Gold price would be a key driver here. Also worthy of note is that both momentum oscillators have generated sell signals.

Harmony Gold Mining Company (HAR)

Not as ultra-bearish as GFI, although HAR has broken a key support of its own. Downside targets are marked out on the chart in blue. A short-term, counter-trend bounce to R61.50 (ish) could make for a high risk-reward short entry (if it gets back up there).

Standard Bank (SBK)

SBK is rather interesting. Although not on a volume spike, it seems to have made a hammer candle formation on a key support level. This is rather bullish. It would be slightly better if we saw a spike in trading volume, so considering that was not the case, it scores a 4/5 on the bullish-candle-o-meter. There are mixed signals though. The candle formation might be bullish, but the momentum indicators are all in a bearish configuration. Well, not entirely… the Stochastic has generated three of four sell signals, while the MACD has generated one of two. This puts us dead even… with four buy signals and four sell signals and another three undecided. Technically that means no trade. Very high risk traders who are disciplined enough to stick to very tight, or intraday stop losses can likely take a long position here, should we have a stronger ZAR by the time markets open locally on Monday. Swing traders though, have no trade setup here.

The Foschini Group (TFG)

TFG has broken a medium-term trendline and has generate a few sell signals on the momentum based oscillators. A short trade with a stop at the two-day high offers a great risk-reward.

Telkom (TKG)

TKG is showing early signs of losing bullish momentum, although the fat lady has not sung yet. There is a potential bull flag setup, but it has not triggered just yet. Worth keeping an eye on in the coming week.

Truworths (TRU)

After a fake break above R50.20, it seems that TRU is heading toward the bottom of the range once more. Sell signals triggering on the oscillators and poor trading updates from the retailers to boot! A short trade here offers a great risk-reward.

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 A dose of patience needed appeared first on Herenya Capital Advisors.

From where we stand, it appears as if some of the crazy “fat tail” risks are mostly behind us now. Trump is not getting anywhere with his recount, central banks are signalling lower for longer interest rates and potentially even more stimulus. OPEC didn’t cut as much oil production as was expected and commodities stocks have started to come alive on the realisation that eventually the world will come out of lockdown and demand for commodities will return. In truth, the way things look right now, even we’re starting to think that stonks only go up…

Offshore trade ideas

S&P500 (SPY)

The consolidation has broken and the SPY is looking rather strong from here.

Philadelphia Semiconductor Index (SOX)

SOX has put in a wild run, but is reaching the upper end of the channel it has been trading in sine March. We’re not calling the short here, but we are advising caution around the upper resistance and note the high probability of a pull back to the middle of the channel.

Dow Jones Industrial Average (IYY)

It won’t happen in a straight line (and a retest of the breakout would not surprise us), but the range break targets $196.89.

Russell 2000 (IWM)

Small caps tend to outperform large caps during this time of the year. It would be nice to see IWM test the upper resistance barrier of this large channel.

Nasdaq (QQQ)

Bull flag breakout and a new record high. Again, things don’t move in straight lines, although it does look like there if much upside still to be had.

Bitcoin (BTC)

The previous ATH is still providing some resistance. We’d still like the opportunity to buy between the $11k and $16k levels. It is a big buying zone, although given the volatility of BTC in general, a 30% to 50% correction before a parabolic push is not that far outside of what can be expected. Note also that a break above the ATH ($20k) would also be a buy.

Gold

Gold bounced nicely off the 200 day moving average, much as it did the last time it tested the moving average in March. For now there is some resistance around $1850. Probabilistically we’ll see Gold test the 200 day moving average again. As long as it does not take out the lows made on the 30th of November, buying off the 200 day moving average could be a good entry.

Brent Crude Oil

We’ve spoken much of the down trend line that has broken, although this week we want to point out the multi-month consolidation that was broken and retested. Oil is looking very strong over the medium-term.

Dollar Index (DXY)

Weekly chart once more on the DXY. The 91 level was taken out, so DXY now opens for 89 in the coming weeks.

USDZAR

Flat bottom triangle targeting that R14.50 level.

Tesla (TSLA)

TSLA short idea from last week not looking so hot. A break above $600 stops this trade out. Don’t fight the trend. I mean, stonks only go up, right?

Harmony Gold Mining (HMY)

We would not be too surprised to see HMY test the recent lows sub-$4 before starting it’s next major leg higher. Obviously this depends on how Gold interacts with its 200 day moving average (above).

South African trade ideas

RMB Holdings (RMH)

R1.32 is still the line in the sand. Above that and things start to get interesting.

Growthpoint Properties (GRT)

GRT is still looking fairly solid. Would like to see it break above the R13.00 level and really get going.

Anheuser Busch Inbev (ANH)

ANH is still in the range shown last week. We’re looking for a bullish break of this range for a good risk-reward long setup.

Aspen Pharmacare (APN)

APN as set up really nicely for a trade back to the top of the channel. Stop loss below R120.

Sasol (SOL)

SOL looking good for the R158.40 target.

Kumba Iron Ore (KIO)

Up, up and away! KIO breaks the right shoulder and invalidates the previous Head and Shoulders setup. Spurred on by record high Iron Ore prices, KIO probably has some legs here.

Woolworths (WHL)

We like the long if WHL can get and hold above Friday’s close.

Vodacom (VOD)

VOD has been a bit frustrating for us over the last few month as it just couldn’t break the range. Has it now formed a Head and Shoulders pattern? Maybe leave a comment below and let us know what you think?

Telkom (TKG)

Not too much to say here. TKG made a nice bullish engulfing candle and the up trend is looking pretty solid. Sit tight and let the market grind toward target.

Standard Bank (SBK)

SBK is also looking great in the medium-to-longer-term. In the short-term though, a breakout of the bull flag could be another nice opportunity to get long.

Sibanye Stillwater (SSW)

SSW has been range bound for a few months now. Watch for a break higher out of this consolidation.

Sanlam (SLM)

SLM is looking strong. Short-term moving averages have signalled a buy, price just recently made it above the 200 day moving average, flat top triangle targeting higher and a potentially strong ZAR (weak USD) as a tailwind.

Coronation Fund Managers (CML)

The R45 level has been a strong resistance level for CML for rather a long time. A break above it makes for a very attractive long trade in our view.

*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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