It has been a challenging week on the trading desk. Markets diverged from standard fundamentals, with weak corporate outlooks paradoxically triggering short-squeeze rallies – most notably in Impala Platinum. To sum it up, the whipsaw rodeo was in town and we got whipsawed good and proper!

While closed positions leaned toward losses this week, our strict risk management rules prevented significant drawdown. By honoring our stop-losses, we kept overall capital losses minor and manageable.

Trading requires continuous adaptation; we refine our execution strategy daily to cut underperformers quickly, protect capital, and focus heavily on scaling our winning setups. Also, weeks like the one just past serve as good reminders to stick to your trading rules, honour your stop-losses and stay focused on the process. The outcome of any given edge is ultimately random, although through consistentcy of approach – or by consistently applying your rules – consitency is of outcome is created.

That said, we did make some mistakes as the whipswar rodeo carried us away… let’s look at the trades we did last week.

Last week

Macro Catalyst

The primary catalyst driving global markets on Friday was the US Non-Farm Payrolls report. Expectations were for an increase of 55k jobs, but the data printed significantly stronger at 162k. This robust figure reinforces the argument for higher-for-longer interest rates (or a potential rate hike), triggering a brief pullback across gold and the broader precious metals complex.

Closed Trades (Take Profit)

Thungela Resources Ltd (JSE: TGA)

• Trade Logic: We have held this trade for several weeks, and it has been one of our strongest performers. To lock in gains, we trailed our stop-loss higher. While this triggered a disciplined profit-take on Tuesday, it secured an excellent return.
• Status: Bought at R113.24 | Closed at R124.65 (1 Sept). Though the stock has continued its upward momentum, enforcing trailing stops remains core to our risk discipline.
• Key lesson: We trailed our stop loss to aggressively here. Prior to closing this we had fallen victim to the whipsaw rodeo, so we were eager to protect our capital and moved our stop too tight. When the volatility of Tuesday came around, we were closed out. We still banked a decent winner, but we could have done better to ride our winners for longer.

Active Open Trades

FirstRand Ltd (JSE: FSR)

• Trade Logic: FSR formed a clean bull flag pattern and confirmed a breakout yesterday, triggering our long entry.
• Status: Active | Bought at R96.00. Slight profit.

Impala Platinum Holdings Ltd (JSE: IMP)

• Trade Logic: IMP reported disappointing earnings yet counter-intuitively rallied. After being stopped out of our short position, we recognized that the market strength signaled a bullish trend reversal, so we flipped our bias and entered a long position.
• Status: Active | Bought at R246.00. Currently facing temporary headwinds following the hot Non-Farm Payrolls print and the subsequent sell-off across precious metals.
• Key lesson: Sometimes you just get trades wrong. Stop-losses are there to save you. It’s ok to change your mind.

Harmony Gold Mining Co Ltd (JSE: HAR)

• Trade Logic: We entered a long position as broad-based buying returned to the mining sector alongside rising spot gold prices. There is bullish divergence between the Stochastic Oscillator and Price, and both the 200 day moving average and support line coincide and held.
• Status: Active | Bought at R329.99 and R324.00 (average price of R 326.99). Facing similar macro headwinds as our IMP position above. On a positive note, gold appears to be stabilizing after the initial decline.
• Key lesson: Here the ‘ol whipsaw rodeo rode us fairly hard as well. We took a bigger loss than we like to take (more details on that trade below) by not sticking to our stop rules. Yes, we all make these same mistakes. It was a good reminder that we need to respect our stop-losses and manage risk before anything else. Nonetheless, we tried to clear the bias and take a new validated technical entry when it presented itself. Our lesson above all is ‘stop-losses save lives’… or the whipsaw rodeo will get ya!

British American Tobacco PLC (JSE: BTI)

• Trade Logic: We have held this position for some time, buying on the thesis that the stock had hit technical support and was overdue for a mean-reversion rebound.
• Status: Active. We entered around R913.00 and are currently sitting at a minor paper loss, but the setup remains intact. We are closely monitoring price action and considering exiting if bullish momentum does not materialise shortly.

Mr Price Group Ltd (JSE: MRP)

• Trade Logic: The retail sector remains under pressure. With MRP breaking down to new local lows, we initiated a short position.
• Status: Active | Shorted at R160.51. The stock has experienced a minor counter-trend bounce, which is expected within a broader downtrend. As long as previous swing highs hold, the bearish setup remains active.

Standard Bank Group Ltd (JSE: SBK)

• Trade Logic: SBK was trading sideways, presenting a low-risk entry near support. We bought the lows targeting a move back toward R337.00.
• Status: Active. Bought at R315.39. Currently showing a modest profit as we wait for further upside momentum.

Sasol Ltd (JSE: SOL)

• Trade Logic: Brent crude has been volatile, but we identified key historical support near R180.00 and executed via a limit order.
• Status: Active. Bought at R180.00. Sasol has had a strong week, though it is currently consolidating just below the psychological R200.00 mark.

MTN Group Ltd (JSE: MTN)

• Trade Logic: MTN printed a double-bottom reversal pattern, opening a pathway toward our structural target near R220.00.
• Status: Active | Bought at R205.00. Experiencing short-term friction today, but position structure remains intact.
• Key lesson: We chased here a little by buying at the open instead of placing a limit order lower down. Our thinking was that it would break higher without looking back, and look back it did. So we’re on the whipsaw rodeo here a little, although we are still within our risk parameters. We just need to admit defeat and take the loss if it turns out that our stop-loss is triggered. Let’s see how this goes.

Reinet Investments S.C.A. (JSE: RNI)

• Trade Logic: Reinet remains significantly undervalued relative to its underlying net asset value (NAV).
• Status: Active. Bought at R 447.00. Price action remains range-bound, but we are holding with our stop-loss set at R 418.51.

Closed Trades (Stop-loss)

Sibanye-Stillwater Ltd (JSE: SSW)

• Status: Closed at a minor loss | Average Entry Price R48.09 | Sold at R47.85.
• Details: Given the broad-based weakness in precious metals, we closed the trade on Monday to mitigate risk ahead of Tuesday’s earnings release. While the market digested the weak earnings and rallied Wednesday, cutting exposure early aligned with our risk parameters.
• Key lesson: It’s a pity to have closed our last positions here at a small loss, specially after we had banked a few good winners on it on the way here. We had taken some body blows and were keen to cut risk before it got out of hand. In retrospect we could have given the trade some more breathing room. Our stop was too tight.

Harmony Gold Mining Co Ltd (JSE: HAR – Tactical Trade)

• Status: Closed at a loss | Average price of R346.16 | Sold at R315.00.
• Details: This was a hard lesson for us as we do not like to take losses these big. We made the rookie mistake of moving our stop loss slightly, thinking we could catch a bounce back. The irony here is that later on, we had what we consider a validated setup and once again too a long position.
• Key lesson: Take the stop-loss early. Do not wait for anything. Once your stop-loss trigers, take it, or it’s the whipsaw rodeo for you (or the gulag, honestly not sure which is worse at this stage)! If we had cut our initial position earlier, we would be in a more comfortable position now. Alas, so we learn. We will do better next time.

Naspers Ltd (JSE: NPN)

• Status: Closed at a loss | Bought at R790.99 | Sold at R769.96.
• Details: NPN continued to trend lower without showing signs of structural reversal and we decided to cut the trade early. Our stop-loss was a R740.00, but once it breached R770.00 on the 1st of September, we decided to exit the trade and focus on higher-conviction setups.

Absa Group Ltd (JSE: ABG)

• Status: Closed at break-even/minor gain | Bought at R226.59 | Sold at R226.70.
• Details: Despite reporting strong financial results, price action stalled into range-bound consolidation, prompting us to exit and preserve capital.
• Key lesson: We cut this trade at break-even as we had taken some pain prior to it and didn’t want to let a winner turn red. In retrospect we should have stuck to our intial stop-loss strategy and we would have still been in this trade. The whipsaw rodeo claims another victim.

Impala Platinum Holdings Ltd (JSE: IMP – Prior Position)

• Status: Closed at a loss | Shorted at R227.06 | Stopped out at R245.50.
• Details: Initiated a short following bleak full-year guidance and rising global rate expectations. The market absorbed the news positively and squeezed higher, triggering our risk stop.

Conditional / Setup Watchlist

Northam Platinum Holdings (JSE: NPH)

• Trade Logic: NPH released full-year results today that met and slightly exceeded market consensus, supported by strong revenue and earnings metrics. Its long-term strategic outlook remains compelling (targeting 15% of global PGM supply by 2030), so we are monitoring the stock closely for a entry, keeping in mind its high sensitivity to underlying PGM basket prices. We would like to see it either pull back to retest the bull flag breakout, or perhaps break the 200 day moving average before we enter.

Pepkor Holdings Ltd (JSE: PPH)

• Trade Logic: PPH has experienced prolonged selling pressure over recent months. Yesterday printed a strong bullish engulfing candle on high volume, followed by a +1% follow-through on Friday. We are tracking the stock for confirmation that the broader downtrend has exhausted. We also note a Hammer candle formation on a significant support level on the weekly chart below.

Exxaro Resources  (JSE: EXX)

• Trade Logic: EXX has reached the higher end of its channel and is slightly underneath the 200 Daily Moving Average. This stock is leaning towards a possible breakout to the upside which will signal a buy.  

Discovery Ltd (JSE: DSY)

• Trade Logic: DSY has been in a downtrend and seems to have broken this trend along with closing above the 50-day moving average and confirming a buy signal.

Thoughts on the week ahead

It was a tough week and we are glad it’s behind us. Next week we start fresh and we have some decent trade setups forming. There are some risk events on the horizon, notably US CPI data on Tuesday which could materially impact risk sentiment (and heavily influence gold prices), so we will watch that data print carefully. Other than that, we remind ourselves to plan the trades and trade the plans. Risk management and an opportunistic mindset are key and we aim to realy focus on these in the coming week.

Also, we’d like to avoid the whipsaw rodeo by all means necessary. So we will be critically cold with our stop-losses. There is no excuse.

Economic Data

Start your trading journey with us today!

We’re posting on TradingView, we’re posting on our blog… but the real magic happens in our client community where you can get access to our ideas as they develop. So, open your account and join us and start taking advantage of South Africa’s Top Broker for both Active Traders and Traditional Investors. We have a Discord server, with a Daily Morning Call at 08:30 (Monday – Friday), where our Trading Strategist shares market updates and posts information with the Community. If you are not trading with us yet, what’s stopping you?

The weekly game plan is back

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 The Whipsaw rodeo appeared first on Herenya Capital Advisors.

We are looking for ways to keep delivering morning call snippets, however we would like to try a new format to communicate some of our ideas and trading results to you, dear reader. Keeping that in mind, this format might change a little as today’s post is only the first one and we will keep improving on it as time goes by.

So, without further ado, let’s get into it!

Last week

Macro Catalyst

The primary catalyst driving global markets and boosting our overall performance this week was core PCE inflation data coming in slightly above expectations. On Friday, Fed Chair Kevin Warsh delivered his keynote address at the Jackson Hole Economic Policy Symposium in Wyoming. While no firm policy commitments were made, his overall tone was notably hawkish.

Closed Trades (Take Profit)

Aspen Pharmacare Holdings Ltd (JSE: APN)

• Trade Logic: We established a long position on 21 August following the broader sentiment surge in global pharma (sparked by Moderna’s record trial results earlier in the week). Following an interim trading update today, the stock experienced brief volatility before stabilizing.
• Status: Bought at R 148.95 – Closed at R 154.65 on 26 August. Looking back, we could have held it for another day given its continued upward momentum, but we are happy to lock in the profit on this one.

Truworths International Ltd (JSE: TRU)

• Trade Logic: Truworths released its earnings yesterday, and after reviewing the report, we noted soft operational numbers. Consequently, we executed a tactical short position. Admittedly, this was a high-risk trade, but it paid off quickly.
• Status: Sold short at R 49.85 – Closed at R 47.00. We continuously lowered our trailing stop-loss to protect gains, successfully locking in a solid profit.

Harmony Gold Mining Co Ltd (JSE: HAR)

• Trade Logic: We already have a Harmony positions, but after Harmony suffered a severe sell-off on Thursday, dropping nearly 10% intraday, we decided to add to our trade. We bought at R 325.00 as we felt confident that HAR was oversold at those levels.
• Status: Bought at R 325.00 – Closed at R 339.00 for a quick R 14 intraday move. This allowed us to capture profits to offset our core position, reducing our new average price on our core position to R 346.16.

Active Open Trades

Thungela Resources (JSE: TGA)

• Trade Logic: TGA was a trade idea given the current drought in Europe and the fact that Europe are not able to use Hydro or nuclear electricity anymore. We then thought to buy TGA with the thought that Coal prices would increase. 
• Status: Active (Increased Exposure). Bought at R97.53, sold half our position at an average price at R118.10. Increased our position size on Monday by buying more at R121.10.

Sibanye-Stillwater Ltd (JSE: SSW)

• Trade Logic: SSW hit a new local peak on Tuesday. Anticipating a run toward R52.00, we entered at the open around R43.00, benefiting from U.S. Treasury announcements, dollar weakness, and rising PGM and gold prices.
• Status: Active (Increased Exposure). Bought at R 43.00 on the 18th – Closed half at R 51.26 on the 21st. We bought more on the 24th at R 50.65.

Harmony Gold Mining Co Ltd (JSE: HAR)

• Trade Logic: We entered a long position following Harmony’s trading statement last week.
• Status: Active. After some active trading during last week, our average price is now R 346.16. This core trade has faced headwinds. However, our tactical intraday trade allowed us to recoup some capital, and we continue to hold the core position for now.

British American Tobacco PLC (JSE: BTI)

• Trade Logic: We believe the stock has hit strong technical support and are positioning for a rebound.
• Status: Active. We entered at R 913.00 and are currently sitting at a minor paper loss, but the setup remains intact.

Absa Group Ltd (JSE: ABG)

• Trade Logic: Absa reported earnings on Tuesday featuring strong full-year profitability; however, the market reacted with a brief sell-off. We bought shortly after the open around R 226.00.
• Status: Active. Bought at R 226.59. We remain in the trade and are currently sitting in a small profit.

Standard Bank Group Ltd (JSE: SBK)

• Trade Logic: SBK was trading sideways, presenting a low-risk entry near support. We bought the lows targeting a move back toward R 337.00.
• Status: Active. Bought at R 315.39. Currently showing a modest profit as we wait for further upside momentum.

Sasol Ltd (JSE: SOL)

• Trade Logic: Brent crude has been volatile, but we identified key historical support near R 180.00 and executed via a limit order.
• Status: Active. Bought at R 180.00. Sasol had a very strong session on Friday, gaining 5.34%.

Naspers Ltd (JSE: NPN)

• Trade Logic: Naspers (alongside Tencent) continues to consolidate sideways within a broader uptrend. We are positioned for an upside breakout.
• Status: Active. Bought at R 790.99. Stop-loss maintained at R 740.00.

Reinet Investments S.C.A. (JSE: RNI)

• Trade Logic: Reinet remains significantly undervalued relative to its underlying net asset value (NAV).
• Status: Active. Bought at R 447.00. Price action has been sluggish, but we are holding with our stop-loss set at R 418.51.

Closed Trades (Stop-loss)

Valterra Platinum Ltd (JSE: VAL)

• Status: Closed at a loss. VAL had a rough week following market speculation that it was the undisclosed bidder in an approach to NPH. The stock fell 5.3% on rumor, and once confirmed that VAL was indeed the interested party, we exited the trade to mitigate potential further downside.
• Bought at R 1475.97 – closed at R 1405.00. 

Vodacom Group Ltd (JSE: VOD)

• Status: Closed at a minor loss. We placed a strict stop-loss at R145.00. As the trend faltered, our stop was triggered. Although the stock subsequently bounced, enforcing discipline through stop-losses remains critical to long-term risk management.
• Bought at R 147.29 – closed at R 144.50

Conditional / Setup Watchlist

Northam Platinum Holdings (JSE: NPH)

Trade Logic: NPH released full-year results today that met and slightly exceeded market consensus, supported by strong revenue and earnings metrics. Its long-term strategic outlook remains compelling (targeting 15% of global PGM supply by 2030), so we are monitoring the stock closely for a entry, keeping in mind its high sensitivity to underlying PGM basket prices. We would like to see it either pull back to retest the bull flag breakout, or perhaps break the recent highs before we enter.

Thoughts on the week ahead

Given the hawkish tone from Kevin Warsh on Friday, and the subsequent move in the Gold price, we think it is likely we will look for the door on HAR and SSW. We did consider closing them both on Friday as they would have set each other off and we could have gotten out with a net zero loss (to small profit) on them both, however we decided to let the US session play out to see how Gold trades. As at the close on Friday, Gold was down a fair bit and this might be the catalyst for us to close the two gold stocks.

Overall, we continue to look for new trades an opporunities every day and closely monitor and manage the positions we have open.

For now though, we hope that you are happy that the weekly game plan is back.

Economic Data

Start your trading journey with us today!

We’re posting on TradingView, we’re posting on our blog… but the real magic happens in our client community where you can get access to our ideas as they develop. So, open your account and join us and start taking advantage of South Africa’s Top Broker for both Active Traders and Traditional Investors. We have a Discord server, with a Daily Morning Call at 08:30 (Monday – Friday), where our Trading Strategist shares market updates and posts information with the Community. If you are not trading with us yet, what’s stopping you?

The weekly game plan is back

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 The Weekly Game Plan is back! appeared first on Herenya Capital Advisors.

Oh, and just a side note, you will notice that we used many weekly charts this week. We did this on purpose, in order to re-take stock of where we are in the medium to longer-term. Sometimes we get very focused on the day-to-day movements and we lose track of where we are. Thus, we look at some weekly charts this week to gain some broader perspective of the trends and patterns playing out in our and other markets.

Bigger picture (offshore markets)

S&P 500 (SPY)

Finally the follow through came (after some good data on Friday). Next level to clear is $430, then it’s clear skies for $461.

Nasdaq (QQQ)

This run is incredible. We think that there is likely much more upside to be had as well, as the A.I. craze is only really getting started in our view. Next target here is $371.

All Country World Index (ACWI)

ACWI breakout also finally printing a new high. Upside target is $102.

Gold

It’s still not looking great for the gold bugs, and we reiterate our call that gold will eventually (maybe in a year or two) retest the bottom of this range at $1650.

S&P 500 Volatility Index (VIX)

Lowest close on VIX since covid. Interesting. We mentioned last week that we might see a ‘return to pre-covid normal’ on the VIX. It might not seem like much, but to have the VIX bottom out around 10 instead of 15 is rather telling of how much less ‘fear’ is influencing the market. Time for some greed to come in and push things to way beyond where they ought to be. It’s buy time!

Brent Crude Oil

Oil remains range bound for now.

USDZAR

Geepers, can we have some reprieve please!? Although our longer-term target is around R21 to the USD, we do think that we will see a bit of a pullback on the back of stronger overall equities next week. Here’s hoping for R18.60.

South African trade ideas

JSE Top 40 Index (ALSI)

It was a wild week, but at least we ended higher. We’re bullish again this week, and although the ALSI chart looks a mess, you will see why when we look at stocks just after this. A general note on this chart though; we’re going to print new highs within the next three months.

Bidvest (BVT)

This flag formation on the daily chart has whipsawed us a few times, but once again it has given a buy signal. Maybe if we say ‘it’s buy time’ enough times this stock will finally catch a bid(vest)?

ABSA Group (ABG)

ABG has been testing and holding the R152 level for a few weeks now. We can see that this level is rather significant. A long trade here with a target at R200 would likely be a good trade. Remember, weekly charts, so it will take a long while to work out.

Anglo American (AGL)

Well it’s not exactly on the level marked in green, but it has been holding R560 like a champion for a good while now. We think it is safe to get long here and look for R760 as a target. Just keep in mind, as is the case with all upside targets, once reached you need to switch over to a trailing stop loss so that you can continue to benefit if the stock keeps trending higher.

Anheuser-Busch Inbev (ANH)

So, we want to say that ANH is a buy at R1025… but, nobody is buying Budweiser and it doesn’t look like that is going to change any time soon. So, we’ll rather say that around R1025 it looks interesting, but we need to wait for confirmation that it is in fact what it says it is, uuhm, we mean that the level holds, before getting involved. Can’t be too careful these days.

Aspen Pharmacare (APN)

APN is still looking fairly bullish in our book. The bullish divergence shown last week on the daily chart does not show up on the weekly, but the stock did close the week close to the highs which has us in good spirits.

BHP Group (BHG)

BHG is trading in a nice upward slanting channel. Up through the middle of the channel and we should see the stock testing the top. Our target for now is R640.

British American Tobacco (BTI)

BTI is once again back to the lows. We reiterate our call for R584 as a downside target.

Clicks Group (CLS)

CLS printed a (almost) hammer on the R239 support. This creates a pretty clear long opportunity with a great risk-reward. It’s buy time!

Sasol (SOL)

SOL is forming a nice base here. We think that it might be a safe time to re-enter the long-term longs here. It’s buy time here for sure.

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 It’s buy time! 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.

Offshore trade ideas (bigger picture)

S&P 500 (SPY)

So, we’ve not hit the downside target yet and by the looks of this chart, SPY is trying to put in a short-term bottom. All indications are that we see a bit of a bounce from the lows here. It’s been a rough year so far and sentiment has gotten extremely pessimistic. This is evidenced in options positioning as well, with the vast majority of contracts trading being puts. The market being the market, is likely going to push for the ‘max pain’ trade, which is currently higher. Therefore, we believe that we are very likely in for a violent short squeeze. Odds are good that the bulls will get sucked in, chewed up and spat out in the process, but for now, we think markets will be strong at least during the first half of next week.

All Country World Index (ACWI)

The $77.34 level marked on the ACWI chart is in fact well below the pre-covid high (which was around $82). Our target in the $70 to $72 region is based on a chart we did rather long ago and thus the target still lives on our chart. Although the trend is firmly down here, we can see a similar bottoming pattern on ACWI as on SPY. The trick here, and on SPY, is to take out the pattern high (this consolidation we’ve seen over the last two weeks needs to break higher). Let’s see how it goes. We’re not removing our downside target; we are just not expecting it to be hit before a short-term bounce.

U.S. Dollar Index (DXY)

It looks like the trend is being tested here. Technically it’s made a symmetrical triangle, but as we know, they can break either way with about equal probability. Our thinking at present is that it is likely to break lower and likely boost global equities in the process.

USDZAR

The Rand is also seemingly testing its recent trend. Should the tertiary trend line (steepest) break, we think it could retrace as far as R17.25 before finding support.

Brent Crude Oil

We’ve removed our previous annotations from this chart and only added in what we think is a large range in which oil is likely to trade for the foreseeable future. Ironically, this is still a bullish view, not only on oil, but on energy as a whole.

S&P 500 Volatility Index

The VIX is still below 35, so the wheels have not yet completely fallen off the bus. We maintain our view that above 35 things get spicey (for global equities), although we do think that in the short-term we likely see volatility subside somewhat and equities put in a bit of a relief rally.

South African trade ideas

JSE Top 40 Index (ALSI)

The 60000 level has been putting up some staunch resistance, but by the looks of the tails on the two most recent candles, it won’t last too much longer. Perhaps we see 62000 next week?

ABSA Group (ABG)

With all this talk of short-term bounces and relief rallies, ABG looks like it might break out of the top of this consolidation. Once it confirms with a close above R192.52, it should make for a decent risk-reward trade on the long side.

Anglo American Platinum (AMS)

This short trade idea could be in trouble is the DXY breaks lower. If you chased it in, or pre-empted your short entry, remember the stop loss is above the upper end of the small range marked in yellow.

Anheuser-Bush Inbev (ANH)

Still no confirmation of the short here, but still on the radar. A stronger rand might help the short trade here actually.

BID Corporations (BID)

No directional idea or bias here, although a tight range (flat) that will likely present a good entry for a breakout trade once it pops. Keep it on the radar.

Capitec (CPI)

CPI looks to be setting up for another leg down. That said, volatility reigns supreme and should we see a strong start to the week, we could see CPI pop out of this small consolidation to the upside. Therefore, the same view must be taken as is the case on BID. No bias or directional ideas, but rather just a good setup that could trade either way, offers and good risk-reward and should be kept on the watchlist.

Dis-Chem Pharmacies (DCP)

Oh no, everybody hates Dis-Chem now… well, anyway. DCP is holding support in a large range. This could be a good entry for a long trade. Stop below support and target at R35.80.

Glencore (GLN)

GLN is looking like it is going to try break above R102 for the seventh time (maybe this time is the charm?). A weaker DXY and a proper squeeze could see GLN finally shooting for the moon (aka. continuing the uptrend).

MTN (MTN)

MTN might be off the hook to buy TKG, but the chart does not look very pretty. As it stands now, R130 is putting up some stiff resistance and could be used as a stop loss for a short trade to R92.

Naspers (NPN)

Just an update on the NPN trade and a reminder that the good trades usually take some time to work out. It might be wise to trail the stop loss down though.

Traders meetup

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 Volatility reigns appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 (SPY)

Well, we’ve not made too many changes to this chart for the better part of this year and we’re not about to make any now. Our target $337.70 remains, and is now firmly in play. The real question is: where to from there?

Nasdaq (QQQ)

As is the case with SPY above, we’ve not moved our QQQ target for a mighty long time either. Just for reference, the support (and target) here is the pre-covid high (as is the case with SPY).

All Country World Index (ACWI)

Another one of the older and unmodified charts from earlier this year. ACWI target zone still in play.

Brent Crude Oil

From a purely technical perspective, the trend is now down. New longs can be initiated if we see a bullish break of the pink downtrend line. Until then, hold onto your butts!

USDZAR

Ladies and gentlemen, we have an upward sloping channel… This might be alarming for some, it might be unbelievable to others, but the market tends to go to where it causes maximum pain before it turns. Honestly, we hope it doesn’t get that bad, but the charts point to where the charts point. What did we say about oil..? Hold onto your butts!

South African trade ideas

JSE Top 40 Index (ALSI)

Again the pre-covid highs are the target / support area (as it has been for some time now).

ABSA Group (ABG)

A little under halfway down from the range top. Let’s see if it can make it all the way to the bottom.

Aspen Pharmacare (APN)

We’d pointed out APN as a long a few weeks ago. The range we were eyeing has broken to the downside. While we are still bullish this stock with a long-term outlook (investment perspective), in the short-term (trading perspective) if the R130 support goes it could get really messy. The macro environment is filled with fear, and heaps of it was piled on this weekend. If we see proper panic, nothing will be spared in the short-term. Thus, we have a general short bias in the short-term, but look forward to buying good stocks at lower prices if the pawpaw hits the fan.

British American Tobacco (BTI)

Flat top triangle broken to the downside. We’re thinking it can get as low as R580 before finding any real kind of support.

Compagnie Financiere Richmont (CFR)

Don’t forget about this one. Still some time to go before the Head and Shoulders of Doom over here give a trading signal, but keep it on the radar folks.

Capitec (CPI)

The break of that support was nothing short of spectacular! Probably wise to close the shorts here, or at least take 80% off. It can go further still, but take some of your risk off the table and bank some profits baby!

Investec (INL)

Clean break! Now we sit and trail our stops and the market fear and panic around us. The target is a long way down, so we’ll have to be patient. Remember, volatility based stop loss. Don’t let winners turn to losers. That said, enjoy the ride.

Naspers (NPN)

Friday saw a massive bounce in NPN, but it’s still in the green (short trade). It’ll be a wild ride, but that is why we have risk rules.

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 Credit Suisse = Black Monday? appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 (SPY)

I looks like SPY finally cracked the tertiary trend line and is ready to take its next leg down. That said, we’ve been expecting the next leg down for a few weeks now and so far all our setups have failed. Is this the one? Perhaps it could be, but if you are going to short SPY, best put a stop loss just above the swing high to protect yourself in case we’ve still got it wrong.

U.S. Dollar Index (DXY)

Looking at a weekly chart of DXY here to serve as a gentle reminder that the last time DXY was trading at these levels was during the dot com crash.

Gold

Gold took a hard smack last week but is still well within its range. Unless anything significant changes in the macro picture, we’d be buyers of gold sub-$1700.

Brent Crude Oil

The primary trend line on Oil seems to be holding for now. Long trades here would have to stop out if that primary trend line (sub-$90) breaks, but until then an ATRx2 trailing stop loss would do just fine.

S&P 500 Volatility Index (VIX)

Another gentle reminder here to buy protection when you can, not when you need it.

USDZAR

So much for our R15.50 target. It seems that fear has creeped back into the ZAR and we’re headed to weaker territory. We’ve added the weekly chart for reference. If the big bad bear finally wakes up from its nap, we could potentially see a strong move in the ZAR towards the covid-crash highs.

South African trade ideas

JSE Top 40 index (ALSI)

The ALSI cracked lower rather violently on Friday. It looks to have bumped its head into resistance and might finally be starting to leg lower. Again, we could be wrong and the broken clock being right twice a day adage comes to mind… As with SPY, a short trade should have a stop loss at the swing high and an ATRx2 trailing stop should do well to capture as much of the move as possible.

ABSA Group (ABG)

There are not a huge amount of charts out there with good setups at the moment, at least not from our perspective. ABG does seem to have reached the top of its range though and looks like a fairly easy short from here. Again though, keep a stop just above the swing high and trail that stop loss.

Top Securities Broker Awards

For the first time ever Herenya Capital Advisors is competing in the Intellidex Top Securities Brokers Awards. 

Launched in 2010, the Top Securities Brokers survey (formerly Top Stockbrokers) is the Industry’s premier independent assessment of the industry. 

The survey is based on a comprehensive survey of securities brokers as well as their clients, with high emphasis placed on client rankings of their firms across an extensive list of categories. 

Last year 6,599 clients of brokers completed the online survey, with the high number of respondents enhancing the credibility of the findings. 

The online survey to find the top securities brokers in SA is now open, and we would greatly appreciate you taking the time to complete the 2022 online client survey and share your experiences. 

To rank Herenya Capital Advisors click here. 

The survey will take approximately 20 minutes to complete and the deadline is 26 August 2022.

All participants are automatically entered into a lucky draw and stand a chance to Win R10,000, offered by Intellidex. 

In the past year Herenya Capital has grown from strength to strength, not only have we been featured on some of the most revered platforms, but we have also been commended by our peers and our clients for our excellent service and tenacity to stay at the forefront of the finance industry. 

Please let us know if you have any queries or require additional information.

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 Where’s the bear? appeared first on Herenya Capital Advisors.

Not a pretty sight…

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

Offshore trade ideas

S&P 500 (SPY)

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

MSCI China ETF (MCHI)

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

Brent Crude Oil

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

Gold

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

Bitcoin (BTC)

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

Ethereum (ETH)

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

Northrop Grumman (NOC)

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

South African trade ideas

JSE Top 40 Index (ALSI)

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

Sasol (SOL)

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

Steinhoff (SNH)

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

The Foschini Group (TFG)

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

Shoprite (SHP)

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

Truworths (TRU)

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

ABSA Group (ABG)

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

Joining HCA trading

HCA trading offers a number of different trading accounts to suit different types of traders. Our offshore trading accounts allow traders to buy shares, ETFs, CFDs and even fractional shares in the United States for only $2 a trade. Locally, we offer shares, ETFs and CFDs at good rates with robust and reliable trading platforms. All our trading, including CFDs, is done on a Direct Market Access basis and thus our clients are able to interact directly with the real equity market and not have to worry about excessive counterparty or liquidity risk. Our prime broker locally is a big four bank and offshore we make use of one of the largest non-bank prime brokers in the world.

Local stockbroking rates

Offshore stockbroking rates

Subscribe for post updates

If you enjoy reading our blog and would like to get email updates each time we post, please subscribe below.

*Please note that these trade ideas form part of a larger weekly plan and the value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market conditions. The risk of loss arising from trading in Contracts for Difference can be substantial. You should carefully consider whether such investments are suitable for you in the light of your circumstances and financial resources.

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

Offshore trade ideas

S&P 500 (SPY)

So the SPY bounced off the 89 day moving average and has closed the gap it left on the way down. Momentum wise, it has generated a buy signal on the Stochastic, although not yet on the MACD. It’s not shown here, but it was interesting to see that during this selloff institutional positioning did not really change. Basically, nobody panic sold into the selloff… in fact, most people were buyers. Seems that the bull is strong yet! How long before we see new highs?

Russell 2000 (IWM)

Bwaa! IWM is the most boring index on earth right now. As has been the case for many, many weeks now; there is nothing to do here until this range is broken.

Nasdaq (QQQ)

Well, the QQQ looks very similar to the SPY. The trend is still up and we’ve seen the dip being bought. “A bull market climbs a wall of worry” they say.

Philadelphia Semiconductor Index (SOX)

SOX, the great leader of U.S. tech stocks, is on the verge of breaking higher. This is a rather constructive setup and one that will likely see not only the SOX print new record highs, but likely QQQ and SPY as well. The bull is strong yet!

Dow Jones Transportation Average (DTX)

DTX is one of the more important indices we keep an eye on as it is a measure of ‘on-the-ground’ economic activity. The better the transport companies do, likely the better the overall consumer economy is doing. We’ve expressed concerns around the breaking of the 200 day moving average on this index in the past. Last week DTX broke its 200 day moving average, and reclaimed it. For now there is no real trade for us here, although we are keeping an eye on the (white) downtrend line as a potential buy signal. We must add though, if DTX loses the 200 day moving average support, we will once again start thinking very hard about defensive plays.

U.S. Dollar Index (DXY)

Once again we are talking about the $93.50 level on the DXY. It is interesting to see that institutional fund managers are increasing their long positions of USD. Should we see continued flow into the long USD trade, we can expect the DXY to break higher. The question is then; will we see softer commodities on the back of the stronger USD? We think that the answer to that is yes… driven by a few things. The Evergrande situation in China is likely to soften demand for iron ore, concrete and many other inputs to large scale construction. We also think that the overall impact is that we see the ‘building’ industry cool off somewhat in China. So what came first? The slow down of the construction boom in China, or the strengthening of the Dollar. Or are the two inextricably linked?

USDZAR

Weekly chart of the USDZAR. Some might see an Inverse Head and Shoulders here. It does look like the trend is turning and that a weaker ZAR is on the cards.

Brent Crude Oil

What is not inextricably linked to China is energy. And energy prices are going up! Oil made a new recent high and has its target trained on the $86.71 handle. Hold onto you (Sasol) butts! We’re going up!

Xtrackers Physical Rhodium ETC Fund (XHRO)

Rhodium has been a hot topic for a little while now. Mostly because it has been one way traffic down for the last 5 months. There is a long and winding fundamental story here, but for the traders who are considering picking a bottom, we offer the following guidance. Wait for the downtrend on the weekly chart to break before hitting the buy button. There are emerging signs that we could be near a bottom, but be patient enough to wait for a proper signal. Also, for everyone trading on the Velocity Trader platform; it’s a pleasure for having the XHRO ETF added to the platform for you. *tips hat*

South African trade ideas

JSE Top 40 Index (ALSI)

Our ALSI short last week worked out very well and we closed it very close to the bottom of the move. For now, we see no new setup here. Although we are mostly bullish going into the new week, we’re not being presented with a high probability entry, so we will be patient and wait for another setup.

ABSA Group (ABG)

The good old fashioned buying zone is once again offering a chance to buy while things look dire. Follow the trend, the bull is strong yet!

Anglo American Platinum (AMS)

Our commentary here is much inline with XHRO above. AMS is on the verge of generating a confirmed buy signal and is worth keeping on the radar. Don’t be over hasty though and wait for the most recent downtrend line to be broken.

Capitec (CPI)

The bull is strong yet! CPI looks like it is about to break to new highs.

Sasol (SOL)

Break, retest, go! We’re holding onto SOL on the CFD accounts with a trailing stop loss. Nothing much to do but give it the space and time to keep trending higher. Even from a longer-term perspective, this is at least a R300 stock. The bull is strong yet!

We’re talking to Ghosts!

We will be having a series of chats with The Finance Ghost and Mohammad Nalla during the month of September. Our goal is to educate the listeners and to let people out there know about what we do, and how we do it.

Petri shared a few war stories and answered some more of your questions. Have a listen to the episode below:

Be on the lookout for the final installment of Herenya September coming next week as we handed the mic to Jonathan, a real-deal day trader and part of the Herenya Team.

Want ideas, insights and research?

*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 The bull is strong yet! appeared first on Herenya Capital Advisors.