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.

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 Kansas City Shuffle 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.

Bigger Picture (offshore trade ideas)

S&P 500 (SPY)

SPY has still not cleared the $420 level (4200 on the index). Yes, Friday was a ripper, but SPY still ended the week lower. As long as SPY stays below $420, we will remain bears. If, or once, SPY breaks above $420, we can buy into that strength, but until then we will remain very cautious and distrusting of this market.

Nasdaq (QQQ)

The QQQ looks a little better as it managed to close near the weekly highs and looks to be in a more bullish setup. It is almost as if this entire index is hanging on to Apple and if anything happens to the titan, things might turn sour for QQQ. It’s hard to shake our bearish bias here, but QQQ might turn out to be the thing that changes our view. The contrast between the setups on QQQ vs SPY is indicative of the tug of war happening in the market, and thus the tug of war happening with our views. The safest bet is likely to step back and allow the market to unfold a little before making any risk-taking decisions. It’s ok to miss the first part of the move, so if our predominantly bearish view here is wrong, we are happy to buy into a new bull market if it comes. For now though, we are still playing the defensive game.

S&P 500 Volatility Index (VIX)

The VIX got going nicely during the week, although Friday saw a turn in fortunes. As you can tell by now, we are not convinced and we stand by our call to buy VIX calls. The tug of war is only going to get worse in our view, and the VIX should pump a little off all this uncertainty.

Gold

We put out a gold chart on twitter on Thursday asking if this might be the top for Gold for now. After Friday’s session, it looks like that might well have been it. Again though, we are not entirely convinced. The facts here are that the Chinese and Russians are still buying record amounts of Gold in the physical market, and the economic headwinds facing the more Westernised Developed Markets have not gone away. Maybe a soothing balm was put on the wounds on Friday, but the reality here is that there is a lot more pain to come. At least, that is what we think at this moment. We are open to Gold moving down somewhat from here, but our base case expectation is that Gold will likely keep pushing and more than likely print a new all time record high. Hold on folks, the tug of war is going to create a lot of volatility.

Brent Crude Oil

Oil managed to get to the bottom of the range we pointed out a number of weeks ago. A bounce back to the top of the range is very likely and we will be using it as an opportunity to get out of the last of our oil facing equity holdings. If the ‘mild’ (narrator: it won’t be mild) global recession in the second half plays out, there is almost no way that Oil will be able to hold the $70.50 level, even if OPEC cuts production aggressively.

U.S. Dollar Index (DXY)

Some time ago we would be arguing that given the bad global economic conditions, the USD should strengthen as investors seek ‘safety’. Now though, maybe investors are starting to realise that Dollars (and the USA in general) might not exactly be as safe or strong as they had always thought. We think that there is a bit of a global power shift happening and that, sooner than we think, BRICS will be the new global powerhouse. DXY below 101 opens for bearish trades and stronger Emerging Market currencies. This will be in our favour.

USDZAR

A bit of a sideways consolidation / tug of war here. Keep your eye on DXY for guidance. We think that a weaker USD is the most likely outcome, so we are calling USDZAR to R17.60.

South African trade ideas

JSE Top 40 Index (ALSI)

So alright, we are bearish on the global picture. It is difficult and painful to be bearish on the local front though. Sometimes markets defy our beliefs… what’s happening here though is the power of rand hedged stocks, commodities stocks and of course, Richemont. CFR currently makes up around 17% or so of the total weighting of the ALSI, which is A LOT. CFR has also been running very hard thanks to luxury goods generally making record profits while the world falls apart. Eventually, well, rather soon actually, CFR will be downweighted in the ALSI and its influence of the headline index will lessen. We think that once that happens we might see the ALSI come inline with global markets a little. For those who entered the short on the tertiary trend line break, you can move you stop to the 72700 level.

City Lodge Hotels (CLH)

CLH has been power! Nice bullish setup here with a target between R4.60 and R4.80. We’ve seen a return of both local and international tourism in South Africa and hotel groups are looking very attractive at the moment.

Sibanye-Stillwater (SSW)

SSW has not run as hard as most of the goldies, but SSW is not exactly a gold stock anymore. It’s been under some pressure thanks for the three other constituents of the PGM group (Platinum, Rhodium, Palladium – and Gold of course). Finally it is starting to show some signs of life. Remember also that Froneman bought SSW stock just above R36, and he has a great track record of trading his own stock. Hold on to your longs here, because in a year or two from now we might see SSW back at R70 or higher.

Anglo American Platrinum (AMS)

AMS has also not participated in the gold rush, obviously because it is not gold. But as is the case with SSW above, AMS is starting to look really attractive. Entering a long here with a first target of R1300, second target or R1400 is in our view a low risk easy trade.

Bidvest (BVT)

Another bullish setup here on BVT. Wait for this flag to break and take the long if you are a trend follower.

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 Tug of war appeared first on Herenya Capital Advisors.

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

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

Offshore trade ideas

S&P 500 (SPY)

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

Russell 2000 (IWM)

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

Nasdaq (QQQ)

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

Dow Jones Industrial Average (IYY)

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

Dow Jones Transportation Average (DTX)

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

U.S. Dollar Index (DXY)

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

USDZAR

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

Gold

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

Brent Crude Oil

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

VanEck Vectors Gold Miners ETF (GDX)

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

Wells Fargo (WFC)

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

Energy Select Sector SPDR Fund (XLE)

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

Want to trade or buy these U.S. index ETFs?

With our offshore trading account you can buy Stocks, ETFs, CFDs, Futures, Options and even Fractional Shares in the United States for only $2 a trade.

Open a new account with, or move your existing account to Herenya and take advantage of the great trading platforms, low fees and interactive community enjoyed by our clients.

South African trade ideas

Aspen Pharmacare (APN)

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

Coronation Fund Managers (CML)

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

Discovery (DSY)

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

Truworths (TRU)

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

ABSA Group (ABG)

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

Bidvest (BVT)

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

Gold Fields (GFI)

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

MTN (MTN)

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

Nedbank (NED)

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

The Foschini Group (TFG)

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

Joining HCA trading

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

Local stockbroking rates

Offshore stockbroking rates

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

The post Focus on the charts appeared first on Herenya Capital Advisors.

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.

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&P 500 (SPY)

After all those ups and downs last week, the market didn’t really move all that much in the end. The SPY has made a nice clear range though that could be traded once broken out.

Russell 2000 (IWM)

Our initial attempt at going long on IWM did not go so well, although IWM has set up again for another attempt at the long trade. A break above $225.76 would trigger a trend following long trade.

Nasdaq (QQQ)

QQQ momentum seems to be fading a little, although it still managed to close above last week’s key level. We still favour the long trade here, with a three-day low as the stop loss.

Dow Jones Industrial Average (IYY)

The IYY setup looks very similar to that on SPY. Once again a simple range break will be the trigger, most likely for a trend following trade.

Philadelphia Semiconductor Index (SOX)

That little range break last week (to the downside) played out and reached its target. The 50 day moving average held up well and now SOX is looking to break back into last week’s range. There is some bullish divergence as well. Overall our thinking here is that a break above 3208 could probably be bought.

Dow Jones Transportation Average (DTX)

The trend is strong with this one! A warning sign here for us is how steep this trend has become over recent months. That said, as long as the bottom channel holds (can be used as a trailing stop loss), we’re happy to take a new long position here in the coming week.

S&P 500 Volatility Index (VIX)

The VIX tagged 20 and was promptly rejected. Overall the market is still clearly feeling very comfortable. Our view is that we’ll likely see a lower VIX and higher equity markets in the week ahead.

US Dollar Index (DXY)

The flag formation we’ve been watching on the DXY has finally given a clear bearish break. It seems that the fear created by talk of higher capital gains taxed in the US were short lived and that the power of the brrr is overwhelming. With all those new Dollars in circulation it’s hard to imagine any other outcome, other than a weaker USD. This break should be supportive of precious metals, commodities in general and emerging markets.

USDZAR

Well, after trying to fight it for a while, it seems that the USDZAR wants to continue to strengthen and fighting the trend is unwise. In fact, as stated earlier, trend following is often the easiest way. On the weekly chart a major support has been broken and it looks like the USDZAR is heading down to that historic large range support. On the daily, we can see that a small triangle pattern has formed. Looking at that triangle more closely on the 4 hour chart, it seems like a decent trend continuation setup. A break below R14.20 would likely see the USDZAR move closer to that much coveted R13.20 level.

Gold

The gold bounce is underway. Although, the 89 day moving average put up a bit of a fight. We remain bullish Gold, unless the $1765 level is broken.

Brent Crude Oil

Brent Crude Oil is holding the 50 day moving average well. We could probably take some longs here, looking for $69.60 as a target price.

Bitcoin (BTC)

So much for the bullish break above the previous high. That goes to show why these crypto’s need to be traded on weekly charts. We remain bullish and hope that this is a deep enough dip to buy. Around $35k would be a really strong buy in our view.

Ethereum (ETH)

ETH has also not followed through as we would have thought. Nonetheless, we remain bullish for the remainder of the year and will use a pullback as a chance to add to longs. If we could see $1420 again, that would be a strong buy for us.

South African trade ideas

JSE Top 40 Index (ALSI)

Oh to be a trend following trader… the ALSI is making a symmetrical triangle and has found support in the ‘buying zone’. Given some risk-on context, our thinking is that we see the ALSI break higher in the coming week and trade to new highs.

FirstRand (FSR)

FSR is back to being nowhere. As long as R49.55 holds, we remain long and patient.

Naspers (NPN)

R3337 is the last line of defence for our long NPN trade. Interestingly, it is also a potential double bottom with some early signs of a bullish momentum shift.

AECI (AFE)

AFE is almost ready to start pushing new highs. We’re switching to a trailing stop loss from here.

Nedbank (NED)

NED broke out of its big range and has pulled back to test it. Once again, this setup is looking really attractive to us. The risk-reward here is very good.

DRD Gold (DRD)

We’re moving our stop loss to entry and letting DRD run.

Compagnie Financiere Richemont (CFR)

CFR broke out of it’s range, but fell right back into it. As long as we don’t see CFR trading below the 89 day moving average, we should see the bullish trend continue.

Anheuser Busch Inbev (ANH)

The 89 day moving average was broken and it seems the move to R1100 is on it’s way.

Blue Label Telecoms (BLU)

Decent opportunity to trade against the trend on BLU here. We’ll have to keep an eye on it to see how it behaves around R3.95. It might be a nice buy down there, although right now it is too early to tell. If you’re not brave (or stupid) enough to short it, the wise thing to do would be to wait for R3.95 and re-evaluate when it gets there.

Bidvest (BVT)

BVT is in a decent looking up trend. We note a hammer candle formation, on a key support level. This could make for a decent long entry for trend following traders.

Dis-Chem Pharmacies (DCP)

DCP trend following long trade. It spent some time in the ‘buying zone’ and has now broken out of a flat top triangle price pattern. Momentum is in the middle of nowhere, but could swing bullish if DCP sees another few up days.

Sanlam (SLM)

SLM is trying hard to change its trend. It is currently testing the bottom of the rectangle it has been trading in for a good few months. Taking a long here would offer an extremely high risk-reward opportunity. The stop loss would be a daily close below the rectangle low, with potential upside targets at the upper end of the rectangle (range) and potentially all the way up to R74 if the rectangle breaks higher.

Sasol (SOL)

We like SOL above the R234 level because the trend has been really strong and it keeps making new highs. It is our feeling that the new highs can be bought into. For context, the weekly chart shows how significant the R234 level is. SOL is a buy here with a target price of R300. If this truly is a longer-term trend change, do not be surprised if SOL is back in the R400 zone within the next 3 years.

Tiger Brands (TBS)

TBS has been range bound for some time now and much like BVT, it has made a hammer candle on a key support level. It is also showing early signs on a bullish momentum shift. This could be a decent long trade to the top of the range.

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 momentum oscillators have both given nice buy signals and the SPY has pushed to new highs. Our upside target is currently $420.69. The dashed blue resistance line (larger of the two rising wedges) might put up some resistance, although given the picture painted by the momentum oscillators, the market does not look too concerned with theoretical resistance levels at this stage. Hold tight, we’re probably headed higher.

Russell 2000 (IWM)

Small caps (IWM) has been outperforming large caps (SPY and QQQ) for some time now. Perhaps that is finally starting to come to an end? The view below on IWM is probably too pessimistic as a Head and Shoulders formation is always easy to spot, but is often spotted from our own bias rather than from the actual price action itself. Either way, it would be interesting to see how the large caps trade in the event that we see small caps (IWM) pull back to test the longer-term trend. There could be a pair trade in here as well, long SPY vs short IWM… Could be a decent trade.

Nasdaq (QQQ)

Keep it simple. Buy the break to new highs and hold tight.

Dow Jones Industrial Average (IYY)

Took long enough, with a few false signals in between, but eventually ‘target reached’. Long bias for now, but not real reason to make any new trades. The trend following trade here is to buy the break to new highs with a trailing stop loss. Just remember, don’t carry too much gearing when the market is at record highs. Try gear into pullbacks bigger than 5% or 10%. Now is not the time to be sitting with 5x leverage. Be long, yes, but don’t be reckless.

S&P 500 Volatility Index (VIX)

VIX holding below 20 and making new lows. This is supportive of a continued risk-on rally in what is seasonally the strongest month of the year for stocks (and other risk assets).

U.S. Dollar Index (DXY)

DXY is still trading in the bear flag formation and has once again dipped below the 200 day moving average. Our view is still one of larger scale DXY weakness driven by brrrr. Time will tell though. For now we do not see any clear trades here and will refrain from making any moves before we can either see the DXY holding well above the 200 dma, or a clear break from the flag formation. Be patient and sit (hold) tight.

USDZAR

The USDZAR seems to be holding the R14.50. We like the long trade here back to the top of the range at R15.55.

Brent Crude Oil

Oil might not reach the trendline support just yet. For now, it looks like it is setting up for a really nice buying opportunity with the downward sloping trendline about to break and momentum starting to give early bullish indications.

Gold

A few different perspectives to be had on Gold right now. The first is that the downward sloping channel has been broken, which is bullish and could see the Gold price trading up to around $1850. The second is that Gold is range bound between $1680 and $1765. For now we will have to hold tight and see if that range breaks or not.

BITCOIN (BTC)

Nice little flat top triangle here on the weekly (logarithmic) BTC chart. The time for the next push higher is upon us it would seem. Remember not to put all your eggs in one basket. Rather buy small and hold tight for the rest of the year. We are still of the view that cryptocurrencies in general will have a great 2021.

Ethereum (ETH)

ETH has broken the highs and like BTC, seems set to print a number of mind-boggling new highs from here.

South African trade ideas

JSE Top 40 Index (ALSI)

There is still some bullish divergence on the ALSI and now the MACD has given a buy signal as well. Seems that the strength of developed market equities is spilling over into emerging market equities. There is also a very high risk-reward long trade to be had if you can get long under 62000 on the ALSI. If you can get a decent long entry, hold tight and allow the market the time it needs to make new highs.

AECI (AFE)

If you are into trend following and don’t mind a few nicks and cuts from trying to catch falling knives, AFE might be a decent long entry here.

Anglo American (AGL)

If you got some AGL on the trendline break, hold tight for new highs. By the close of Monday, you can use a 3-day low trailing stop loss to protect gains.

BHP Billiton (BHP)

BHP is lagging behind AGL somewhat. It sort of makes sense, considering that they have a different commodity mix and thus are moved by different inputs. Nonetheless, we think that BHP will likely play some catch-up with AGL soon. So for those who missed the bus on AGL, BHP is another long opportunity.

BID Corporation (BID)

Resistance becomes support… Moreover, the momentum oscillators might trigger a decent long entry within a few days. We like a long trade here with a stop below R280 and a first target of R320. Thereafter, trailing stop loss and hold tight.

Bidvest (BVT)

Nice bounce from BVT. It should be safe to switch to a trailing stop loss here and hold tight until that trailing stop loss is taken out.

Compagnie Financiere Richemont (CFR)

CFR has been range bound for some time. With a weaker USDZAR and general global risk-on sentiment, a bullish break of this range on CFR could be a very good long entry point. The MACD has also produced a long trigger. We really like CFR for a long trade once it can maintain a daily close above R148.

Discovery (DSY)

The prospect of a weaker USDZAR does cause some concern for long trades in the Financials sector, although a bullish break from this small range on DSY could be a decent buy. The setup ticks most of the boxes for a trade you want to take long, although it needs to get and hold above the red and orange moving averages. Those are the 50 day (red) and 89 day (orange) moving averages. A break above those should coincide with a break out of the small consolidation as well. Some caution is advised here. This is a great long setup, but if the USDZAR loses a ton of ground during this coming week, Financials in general might fall on their swords.

FirstRand (FSR)

We took the long here a little while ago and are currently on the verge of stopping out. Not all trades are winners. The weaker USDZAR narrative is a concern here as well. We’ll hold tight until we’re stopped out or otherwise.

Glencore (GLN)

GLN is looking fairly interesting for a long trade as well. The MACD is rounding out nicely and on the verge of generating a buy signal (also note the bullish divergence). As for price, it’s holding above the 50 day moving average rather well. Long positions can be taken here with a stop loss below Friday’s close (for the ultra aggressive traders) or below R55 (for the not-so-aggressive traders who prefer smaller positions).

MTN (MTN)

The MTN chart is looking very constructive indeed! A nice little trend following play is on the table. Buy a break above R89.35 with a stop loss below R83.60, then hold tight and allow the trend (and the catalytic good news over the weekend) to do it’s thing.

Sibanye Stillwater (SSW)

We’ve not looked at any other gold (or precious metals) stocks this week as there are not as many attractive setups to be found. SSW does get a mention though for a few reasons. First, it is in the buying zone for trend followers. Second, it has broken and retested a bull flag. Third, the momentum oscillators are gearing up for a buy signal. Lastly, SSW has been lagging behind peers for a little while now and could attempt to play some catch-up. Also, a weaker USDZAR would likely be supportive of SSW. Hold tight.

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 Hold tight, we’re trending higher appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 Volatility Index (VIX)

We’ve been keeping our eyes on the 20 level on the VIX for a while now. Our thinking is that once the VIX can get and hold below that 20 level, we should see a rather strong rally developing in the equity markets. Over the last two weeks, the VIX has been spending more and more time beneath the 20 level and even closed out the week below it. This leads us to believe that we are in for a rather strong push in equity markets in the weeks to come.

S&P 500 (SPY)

Once again the support held. Price action, however, is consolidating tighter and tighter. The bearish divergence has not yet been invalidated, although a break above the $400 mark will not only print a new high, but also likely see the MACD break the trendline (divergence) as well as price trade above the (pink) divergence resistance. A potential buy signal could be the MACD breaking its own down trend resistance line.

Russell 2000 (IWM)

We don’t have too much commentary here, but we do like the bounce off the 89 day moving average. A break above the 50 day moving average could signal further upside.

Nasdaq (QQQ)

The ABC setup on QQQ is still present, although if price breaks above the high’s of B, the setup will be invalidated. We’d thought that a close below the blue support (at $312.11) would likely lead to a larger scale correction. It seems that the level has held though. We’d still be sellers around $320, although the risk-reward on offer from that level is really very high. In other words, we like that we can take 1 risk for 20 reward, which means we don’t really have to risk very much at all to have a stab at the short trade. That said, if the high’s of B are broken the trade will likely switch long.

Dow Jones Industrial Average (IYY)

Looking at this chart makes us wonder why we ever doubted the Fibonacci projection in the first place. The $103.04 level, as projected by the Fibonacci retracement (measuring the COVID-crash) has been the target for many months now. By the looks of the things, the trend is strong and the target is in reach.

U.S. Dollar Index (DXY)

So the DXY eventually hit (and broke above) its 200 day moving average, which was our base expectation once the falling wedge had broken. From here, many things are possible. At this stage we cannot discern a clear path forward, other than the channel it is currently trading in. We need to sit back and allow the market to show us where to from here.

USDZAR

Once again we use two charts on the USDZAR. On the left, we see a fake break out of the strong resistance downtrend line that has been in place for a long time. Another push above the downtrend resistance could be a strong buy signal for a longer-term trade on ZAR weakness. On the right, we see the USDZAR ranging between R14.50 and R15.55. We also see that it is now, for the third time, trying to get above the 89 day moving average. Usually the 89 day moving average is a decent trend indicator. In other words, once we see price establish itself above the 89 DMA, we tend to see price trend upward (with the converse being true in bear trends). We think in the short-term, we probably see USDZAR trade in this range (on the right) for a little while still to come. Our first call is that we’ll see the USDZAR trade towards R15.50 in the coming weeks.

Brent Crude Oil

Although we would like to see Brent Crude Oil test the longer-term trend line, it does seem that this consolidation around the 50 day moving average is rather bullish. Besides… there’s nothing like a container ship being wedged in the Suez Canal and blocking 16% of global trade from taking place to really get oil prices pumping… The world is a ridiculous place, but here we are.

Gold

Gold held the $1680 support level and seems to be breaking out of a bearish channel. This setup looks rather bullish to us.

Bitcoin (BTC)

We’d be buyers of BTC once it breaks the highs from three weeks ago (trades to new highs).

Ethereum (ETH)

ETH would also be a buy once the previous high is broken.

South African trade ideas

JSE Top 40 Index (ALSI)

The ALSI bounced hard on Friday, engulfing about four red days in the process. There is also bullish divergence and what looks to be a developing buy signal on the MACD. We think that the ALSI could be trading at new highs by the end of the coming week.

Anglo American PLC (AGL)

AGL is bouncing from the buy zone. It also broke its tertiary (down) trend line. We like this setup for new highs on the AGL chart.

AngloGold Ashanti (ANG)

ANG has traded down to a rather significant support level. We like the long from here for a very high risk reward trade.

Aspen Pharmaceuticals (APN)

APN is still in the large upward sloping channel. During the last week though, APN had sold off pretty hard. Our current long position will stop out below R132, although that R132 level could offer a great long entry for those who are not currently in this trade. R132 at this stage, represents both a historic horizontal support / resistance level, as well as, the 200 day moving average. Below R132 and all bets are off.

BHP Billiton (BHP)

BHP is looking really good. The 89 day moving average held and BHP has bounced very well off the support. It’s also broken its short-term downtrend. We’d like to see new highs on this chart.

BID Corporation (BID)

BID broke above the resistance zone and put in a good rally. It has now pulled back into what was the selling zone and seems to have found support on both the 89 and 50 day moving averages (with the 200 day just a little lower). The selling zone now turns into a buying zone. With the break of the short-term downtrend, we like BID for a long trade.

Bidvest (BVT)

BVT has made a nice little consolidation over the last three sessions. A break higher out of the consolidation could see BVT trading to new highs.

Capitec (CPI)

The trend line we’ve been eying on CPI has broken and triggered a high probability long trade.

Discovery (DSY)

DSY has made a nice consolidation during recent weeks. A bullish break of the consolidation will likely lead to new highs.

FirstRand (FSR)

FSR has a similar setup to DSY and BVT. This time though, it is bouncing off the 89 day moving average. We like FSR for a long trade to new highs.

Gold Fields (GFI)

GFI is ‘walking the line’ with both the 89 and 50 day moving averages, with early signs of a bullish momentum shift. If Gold can catch a bit of a bid and GFI can clear the resistance around these moving averages, we could see a decent rally.

Growthpoint Properties (GRT)

GRT spent four sessions consolidating on the 200 (and 89) day moving average. This opens for a long trade with stop below the consolidation, which we can switch to a trailing stop loss once the trade is in the money. We think that there will be many new highs on the cards for GRT in the year to come.

Harmony Gold (HAR)

Similar to GFI, HAR is on a significant support level which seems to be holding. Once up and clear of the 89 day moving average, HAR is in trend changing territory. We like the high risk-reward long trade on offer here.

Impala Platinum (IMP)

Nice bull flag on IMP. There is also some decent bullish divergence. New highs are on the cards.

Investec (INL)

Only one chart on INL this week. We can see that INL held the breakout level very well, even making two hammer candles on the level. A long trade to new highs and a stop loss below the 89 day moving average.

Imperial Logistics (IPL)

IPL closed above a key resistance level on Friday, triggering a long trade looking for new highs.

Jubilee Metals Group (JBL)

JBL is in a solid up trend and there are a host of fundamental reasons to be long of this stock with a very long-term outlook. Those aside, JBL made a proper hammer candle formation off the 50 day moving average and then bounced back higher. We like JBL for a long trade. Since we are bullish JBL over a very long timeframe, we are hesitant to give a target price on a short-term trade as new highs are almost guaranteed here. We’d rather use a trailing stop loss (ATRx2) when taking new long positions in JBL.

Liberty Holdings (LBH)

LBH bounced well off a longer term horizontal support level. It also made two hammer candles in the process. We like the LBH long trade, with a hard stop below the swing lows. The first target would be the 200 day moving average, but once LBH gets above that we could se R72, or even new highs.

Mondi (MNP)

Patience finally paying off on MNP. We’ve been holding this long trade for a while. Finally it looks as if MNP is going to start making new highs.

MTN (MTN)

Old Mutual (OMU)

OMU has bounced off the 200 day moving average, which we have seen in the past can be a rather significant buy signal. To be extra safe, it might be wise to wait for OMU to clear the downtrend line indicated on the chart below. The brave and the disciplined could enter a long now with a stop loss below the swing lows.

Redefine Properties (RDF)

RDF is holding both a trend line and the 89 moving average. The momentum oscillators are also starting to show early signs of a bullish shift. We like the high risk-reward on offer to the long traders here.

Resilient REIT (RES)

RES, like to many others, has held the 200 day moving average and has bounced off it rather nicely. Again here, RES offers a good risk-reward for a trade to new (trend) highs.

RMB Holdings (RMH)

RMH cleared the resistance at R1.35 and is now testing the R1.70 level. We think it wise to wait for a break above R1.70 and to buy into that strength.

Sappi (SAP)

Nice bullish engulfing candle off the 50 day moving average on SAP. We like the tight risk-reward trade to new highs here.

Standard Bank (SBK)

SBK putting in a bounce off the 200 day moving average, as well as, a significant historic horizontal support level. There is also decent bullish divergence between the stochastic oscillator and price. Once again, a high risk-reward trade that could see the stock price making new highs (in the context of its current trend).

Sanlam (SLM)

We’ve widened the rectangle (consolidation) that we had on the SLM chart to take the new highs it made into account. We note now that price has bounced off the 200 day moving average, which is supportive of the ‘changing trend’ narrative. We like the long trade here with a stop below the 200 day moving average.

Sasol (SOL)

SOL was a nice buy in the buying zone. We’d like to see it break the R234 level and keep this bullish trend in tact. Very faint, but technically valid bullish divergence is present as well.

Sibanye Stillwater (SSW)

SSW is looking good for a long trade. It found support in the zone between the 50 and 89 day moving averages and looks set to break the short-term downtrend that it has been in for the last few weeks. We’d be buyers once the downtrend line is broken, with our eyes on new highs and a stop just below the 89 day moving average. Also worth noting is that Platinum Group Metals are looking really good (and have had a strong past week or so) and contextually, SSW is lagging behind other PGM stocks. So it might have some catching up to do.

Woolworths (WHL)

WHL has also broken its short-term downtrend. Although the MACD is not lined up just yet, the stochastic is starting to fire off some buy signals. Once again, the long trade here offers a tight and clear stop loss with a target in the region of new highs. Once the trade is in the money, a trailing stop loss would probably be the best way to manage it.

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 No pullbacks, only new highs please appeared first on Herenya Capital Advisors.

Bigger picture

Gold

Gold is sitting just above the $1680 support level and is looking very oversold. Although momentum is still pointing firmly down over a longer timeframe, in the short-term we might see Gold bounce from the support here. Perhaps we buy the dip for a retracement to $1750?

Brent Crude Oil

Brent Crude Oil has been super strong ever since the longer-term downtrend was broken. This current uptrend is firmly in place and there is plenty of room for a pullback without it breaking the current uptrend. That said, we’ve been living in hope of a retest of the $60 level, which has not happened. Recent news of extended lower production from OPEC+ drove Brent Crude Oil strongly higher in the last half of last week. The first of our upside targets has now been reached and by the look of things, the other two upside targets (old support/resistance levels) are coming into play. New long trades should probably not be taken here. Waiting for Brent Crude Oil to dip back into the ‘buying zone’ between the 10 and 20 day moving averages would be the better way to play this.

USDZAR

There are two ways to look at the USDZAR right now. The first is that there is overhead resistance looming around the R15.50 – R15.60 zone. We could see a potential reversal from those levels back towards the R14.50 level. The second is to consider the long standing downtrend line that was broken on Friday. Provided the USDZAR can get up and clear of R15.60, the R16.16 level becomes a target. Should it break above R16.16, it would seem that the long-term trend of ZAR weakness will return.

US Dollar Index (DXY)

A little bit of whipsaw, but the falling wedge is playing out. Watch for resistance and a possible reversal around $93. Above the 200 day moving average and things will start to get really interesting.

S&P500 (SPY)

The channel held! Two very bullish looking candles in a row, right on that channel support as well. The ‘buy the dip’ crowd is relentless. The trade would be to take a long back to the upper end of the rising wedge. Seems our $400 level is back on the table.

Russell 2000 (IWM)

Another stock index chart, another massive hammer! There are a lot of proper hammer formations all over the market after Friday’s reversal. In the case of IWM, it’s off the 50 day moving average. We could see a bounce here and a return to the uptrend.

Nasdaq (QQQ)

Hammer time! Maybe not as nice as the one on SPY, although from a fairly oversold position, QQQ looks likely to bounce back to the 50 day moving average from here.

Philadelphia Semiconductor Index (SOX)

The hammer here looks fairly good too. This time it’s off the bottom channel support and from an oversold position. Again, the MACD is still showing longer-term bearish momentum, although that is not enough to outweigh the hammer at this stage. The Stochastic is slightly oversold, which could increase the power of a bounce.

Dow Jones Transportation Average (DTX)

DTX popped back into the channel and is a stone’s throw away from all time highs. A break above the 1365 level would indicate more record highs are on the way.

Bitcoin (BTC)

Well, I’ve gotten it wrong on the cryptocurrencies pretty hard over the last two weeks. Overall this chart setup looks constructive. With some ‘risk on’ in general markets, it would be nice to see a new high on BTC.

Ethereum (ETH)

ETH tested the break out from the previous all time high. Subsequently, the support level held (and did so with a nice hammer candle formation) and price bounced higher. Some ‘risk on’ sentiment would likely do well to drive ETH higher.

South African trade ideas

Top 40 Index (ALSI)

The trendline is holding well. Until the uptrend line is broken, there is no real reason to be looking for shorts on this index. A break above Tuesday’s high would likely make a good long entry.

Transaction Capital (TCP)

TCP is a long standing favourite pick, although we’ll not delve into that today. TCP has broken out of a rectangular consolidation and above a key resistance level. Momentum seems to be in its favour as well. Overall, picking up some TCP on the break out offers a good risk-reward entry on a high quality stock.

Truworths (TRU)

TRU is still consolidating inside the rectangle around the key resistance level. Initially the thinking was that we might see a reversal around the resistance level and a move toward the lower end of the large range. Although that is still a distinct possibility to stay open too, it now seems more likely that we will see a break higher out of this rectangle. Either way, waiting for confirmation is advised. Both trades offer good a risk-reward and thus a pure mechanical trade based on a directional break from that rectangle is the way to play it.

Tiger Brands (TBS)

This setup has been brewing for a long time. It has given many chances to trade the range, although the trade that I am waiting for is the breakout of this range. For now, still nothing to do but wait for a directional break. Keep this one on the watchlist.

Standard Bank (SBK)

SBK rested its previous resistance (now support) level for a solid two weeks and seems to be holding well. A long entry here with a trailing stop loss (and a hard stop below R130) is the call.

Sasol (SOL)

A little bit of patience can go a long way. Oil has been charging and looks sets to keep charging. Subsequently, there is likely no reason to get out of long positions on SOL. R234 might put up a bit of a fight, but once clear of that, we’re looking for R300.

Netcare (NTC)

NTC is still looking rather constructive. Another day or so of higher prices and the momentum indicators will have generated all the bullish signals they can. Combined with the small downtrend break, this is a fairly good setup.

Nedbank (NED)

NED is in the process of establishing a new longer-term uptrend (as are many stocks on the JSE actually). For now though, there is still nothing to do on NED. This rectangular consolidation is yet to give a trigger, but is most definitely worth keeping a close eye on for a signal.

MTN (MTN)

MTN has, as always, a host of problems. The most seemingly insurmountable of all, and also only at this very moment because MTN are literally always in trouble, is that they need to register 37 million of sim cards in Nigeria in four weeks. Honestly, I don’t see how they are going to do it, but, do not underestimate the impact of a higher oil price and an emerging market basket buy order. A break out of the small rectangle would offer a great risk-reward long trade.

Investec (INL, INP)

First the fake out, then the breakout! This looks like the start of a long slow grind toward R58.

Harmony Gold Mining (HAR)

The short trade is not looking very good anymore on HAR. It does look like a spinning top that tagged the 50 day moving average, which could be seen as bearish. Although HMY closed near the highs in the US, so odds are we’ll stop out of shorts on Monday. A bounce in the gold price, and keeping the USDZAR in mind, could send these gold stocks aggressively higher.

Exxaro (EXX)

EXX is in a nice strong uptrend with a bullish engulfing candle after a short pullback. Add a potential momentum based buy signal and you get a hard stop under R160 on a long trade with an ATRx2 trailing stop. You could probably take a chance and load a buy order around the 20 day moving average and with some luck, early morning illiquidity will get you in at a decent price.

Dischem Pharmacies (DCP)

It looks like DCP has made a bull flag with support right on the 50 day moving average. We’ve seen the 50 day moving average has been solid support the last five times it has been tested (four if you only count those above the 200 day moving average). There is also the makings of a momentum based buy signal. The trade would be to go long once the bull flag breaks.

Coronation Fund Managers (CML)

CML looks to be in the process of establishing a solid uptrend. Right now it is in a rectangular consolidation. I would be looking to go long once the consolidation is broken. Emerging markets will probably be a big winner from ‘risk on’ sentiment, which bodes well for CML.

Bidvest (BVT)

BVT has gotten clear of its consolidation as well. Long here with a stop under R165.

BID Corporation (BID)

The short trade on BID has been stopped out. It has broken out of resistance with some flair too! Long and strong from here, although I would not chase it. Rather wait for a retest of the R300 level.

Brait SE (BAT)

The BAT trend change is not going so well. For those that like really crazy high risk-reward ratios and aren’t scared to take a stop loss, taking a long at these levels could be a great trade. If R2.35 breaks though, I guess numbers can get smaller.

Gold Fields (GFI)

The same commentary used for HAR applies to GFI. Technically the Head and Shoulders pattern has still not been invalidated and Gold could put in a decent bounce without GFI breaking the right shoulder. Our stop is above that right shoulder, so there is really nothing for us to do here right now but stick to the game plan.

Aspen Pharmaceuticals (APN)

APN is on track. Good trades take long to play out. Still looking like we’ll see R165 to R170 in the weeks to come.

*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.