We’re not saying that the melt up is over. Hell, it could go for another year or so. Just in the very short-term it seems like the rally might have run out of steam on Friday and is due a pull-back. Let’s look at some charts and you’ll see why.

Offshore trade ideas

S&P 500 Volatility Index (VIX)

The VIX has held the base around 15, but put in a decent up-day on Friday. This might have been some of the smart money buying cheap protection in the face of stretched equities. A spike up to the low 20’s here would not be too surprising.

Philadelphia Semiconductor Index (SOX)

SOX has had a great break out from the flat top triangle. Friday’s action resulted in a spinning top candle formation though. A gap lower at the open on Monday with red action all day will likely create a shooting star candle formation. Not the end of the world, but maybe enough for it to go test the break out level again. Keep in mind that a large part of this index is NVDA, which was driven higher by high options volumes last week. Fade the calls…

S&P 500 (SPY)

Bit of a doji on the daily candle there on Friday. Interesting to see that it formed just under what was a historic upward sloping support (trend) line. Again, we’re not calling for the end of the world here, just a bit of a breather.

Dow Jones Transportation Index (DTX)

Well, thank you Avis for trying harder and doubling in a day so that DTX could fly! Note that the trend here is firmly up, but again, a small pull-back would make sense.

Russell 2000 (IWM)

We’ve been tracking ol Russell (the love muscle) for a while now. Finally the break-out came. Hopefully this is the start of a 12 month long grind higher. But first, fade the calls and let IWM retest the break out level.

Nasdaq (QQQ)

We’re really picking tops this week it seems. Again though, not the greatest action at the close of the week. One last pull-back before the Santa Rally arrives?

U.S. Dollar Index (DXY)

DXY finding a bit of resistance around 94.50 (and support at 93.50-ish). Our view is that DXY should continue to climb over the next 12 months, although it will have to break this range (marked in white) first.

Brent Crude Oil

Weekly chart on Brent here. It looks rather likely that we see it pulling back to test the trend line marked in white. There was some news over the weekend that OPEC will be increasing prices to their biggest customers… so oil is a bit of a wild card now. We could see it gap up rather a lot when futures open. The words ‘energy crisis’ are ones you will probably see a whole lot before our summer is over. We maintain our bullish view on oil and energy and think that weakness continues to be a good opportunity to add (buy).

Gold

Nothing to do just yet, but keep watching this weekly chart. Remember, the best trades take a long time to set up. Patience young Padawan.

USDZAR

USDZAR overshot the resistance initially, but now looks set to make a push to the bottom of the channel. We would guess that an encouraging election result might ignite some interest in SA assets and lead to some inflows into our market. In a strong ZAR environment, local retailers and banks come to mind.

Cryptocurrencies

Ethereum (ETH)

ETH is doing better than BTC at this stage. Call it the leader if you will. It’s made new highs and is grinding ever-so-slowly higher. There is nothing about this chart not to like. Sitting long for another month seems like the right trade.

Bitcoin (BTC)

BTC is trying, but hasn’t quite yet broken free from its resistance. Maybe some of those TSLA call profits will make its way to the crypto space in the coming weeks? A large portion of the market seems focused on the shi… altcoins and NFT space at the moment though. Once the apes realise that most altcoins are merely pump and dump schemes, they will find their way back to big daddy Bitcoin.

South African trade ideas

Anglo American PLC (AGL)

Well… not many words are needed here. This chart looks like a dumpster fire.

AngloGold Ashanti (ANG)

ANG needs to be watched in conjunction with Gold (above). If Gold can break out of that large triangle and ANG can hold above the 200 day moving average, we could be setting up for a decent strategic long here. Keep in mind that miners often lead the actual metal. This is worth keeping on the radar.

Brait SE (BAT)

If you’re not following @tradinglikeafox, you should be. He did a good thread on ‘at home exercise’ companies earnings that were disappointing. The ‘lockdown’ trades are out of steam and people are returning to the outside world. This bodes well for BAT as its gym business is going to do well. Looking at the chart though, it broke that range nicely and had a multi-week pull-back. Now it’s made a decent bullish push again and momentum is turning proper bullish again. New (recent) highs are on the way.

BHP Billiton (BHP)

Another dumpster fire looking chart. This is not as clear as AGL though as BHP has some oil exposure. Nonetheless, the chart is pointing down.

Naspers (NPN)

NPN is not looking good at all. We’d thought that this stock could break higher, but it is starting to look like we got it wrong. Careful with the longs here.

Sasol (SOL)

Following on from our comments on oil (above), SOL could be very much in play in the week ahead. Nice chart setup too.

New educational content

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

Joining HCA trading

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

Local stockbroking rates

Offshore stockbroking rates

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

The post Fading the calls appeared first on Herenya Capital Advisors.

Offshore trade ideas

Dow Jones Transportation Index (DTX)

A nice clean break here on the DTX. This was the overall buy signal for U.S. equities. From here, it looks like we are headed for new highs.

S&P 500 (SPY)

The early warning served the market well. As is the case with most U.S. equity indices right now, it looks like we are firmly headed for new highs in the coming weeks.

Bitcoin (BTC)

Talking about headed for new highs… BTC is looking stronger than that awkward feeling of discomfort and weirdness when you’re stuck in traffic behind some guys sitting on the back of a bakkie.

Ethereum (ETH)

ETH is also looking very strong. Our thesis of a parabolic move in the last quarter of this year still has hope.

U.S. Dollar Index (DXY)

Back to reality a bit and it looks like the DXY has gotten stuck in a small range. It is a bit hard to read now, but it does seem logical that the DXY should come and test the $93.50 to $93.00 level before continuing to trend higher. There might be a few choppy weeks ahead with short-term USD weakness as it tests the break out. Overall though, we think that this is the start of a new “stronger dollar” trend and that a retest of $93.00 could be a decent chance to move some ZARs offshore.

USDZAR

Our stronger ZAR call two weeks ago had a choppy start, but worked out in the end (8 cents to go). Given our thinking above, we imagine that the USDZAR trades down to around R14.15 to retest what is a fairly significant level.

Brent Crude Oil

It’s so close you can taste it! Starting to wonder it the time for a pullback is not starting to get close now. For now though, sit patiently and start pondering where and how a trailing stop loss can best protect gains made here.

American Tower (AMT)

We highlighted AMT as a potential buy two weeks ago and once again bring it to your attention. Above $270, and this stock is headed for new highs.

South African trade ideas

JSE Top 40 Index (ALSI)

Once again we are just posting the ALSI chart to say that we don’t really have a clear setup on this market and thus will be staying out of the way.

Aspen Pharmacare (APN)

APN overshot out initial long target by a country mile. Since then it has pulled back into the original target zone. Interestingly this seems to now be a zone in which some accumulation is taking place. It could make an interesting long with a clear stop loss from here. Worth keeping an eye on.

Clicks Group (CLS)

The retailers in general are definitely worth keeping an eye on over the next week. If the ZAR eats its jungle oats, retailers could fly. So far CLS has the most clear setup to watch. It’s a little less liquid and thus a little more wild, so trade with caution.

Woolworths (WHL)

There is no actual buy signal on WHL just yet, but retailers could be the play for next week, so it is definitely worth having WHL on your radar.

Capitec (CPI)

Patience will be rewarded. The seller stopped the breakout in its tracks at R1906, although this has created a good long setup. There is big divergence and a solid trend in place. CPI could be headed for new highs.

Sibanye-Stillwater (SSW)

SSW has had a great run from the R45.00 – R46.00 level. It has now put in two fairly bearish looking daily candles, right in and below a previous support zone. Maybe it’s time for the shorter-term traders to bank some profits here?

Jubilee Metals Group (JBL)

JBL is exactly the opposite of SSW, which rings an alarm bell somewhere in the back of this analysts head… Nonetheless, this is a clear break in a strong up trend. So this too looks like it is headed for new highs.

Mondi (MNP)

We havent pulled the trigger on the long trade here yet, but MNP is looking juicier and juicier.

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 Headed for new highs appeared first on Herenya Capital Advisors.

Offshore trade ideas

Dow Jones Transportation Index (DTX)

This is our canary in the coal mine. If DTX can get and hold above both the down trend line and the 89 day moving average, it will trigger a buy for us on most U.S. equity indices.

Russell 2000 (IWM)

The going nowhere slowly chart. After a long flat like this, all we can know for certain is that a large move is coming. Until this range breaks though, there is nothing to do here.

S&P 500 (SPY)

SPY might be leading the pack here with a buy signal. It’s not the strongest buy signal ever generated (4 out of 6), so it’s best to wait for the DTX to confirm.

Brent Crude OIl

Regular readers of our blog are probably bored of us going on and on and on about oil… but we’re almost at the $86.71 handle. We’ll have to see what happens after that target is reached. Fundamentally, there is no reason for oil to come down any time soon. At least not in our view.

Xtrackers Physical Rhodium ETC Fund (XRHO)

The weekly chart has not broken yet, but this is still very much a commodity to keep an eye on.

Platinum (PL1!)

Decent break of the down trend here. It would be nice to see a push to $1140 and get above all the moving averages. Hopefully this is the start of a new multi-month up trend.

Palladium (PA1!)

Palladium also rallied hard over the last two sessions of last week. If it can get above $2150, things will get very interesting in the PGM space.

Bitcoin (BTC)

Weekly, logarithmic chart om BTC is still looking very bullish. Can we have that fourth quarter melt-up now please?

USDZAR

A bit of a bumpy week for the ZAR last week. Our view, for now, is somewhat undecided. We saw a lot of USD buying last week (DXY not shown in this post), so by the looks of things, emerging market currencies might remain under pressure. Besides, this chart is giving some mixed signals at the moment so it’s probably best we just stay out here.

South African trade ideas

JSE Top 40 Index (ALSI)

Nothing like a little bit of whipsaw on the ALSI to remind you that to be a short-term trader you have to use stop losses. Again, no real read for us here, so we’ll sidestep this market for the week as well.

African Rainbow Minerals (ARI)

ARI finding support on a key level here. It could get really interesting once that down trend is broken. Might be worth taking a small long here and adding into it once that trend line is broken. Just be careful with liquidity here.

BHP Group (BHP)

Above R398.00 and things get interesting. Maybe a small long to start with and again adding to is once it gets going.

Capitec (CPI)

No real trade here, just an observation. Last week we’d thought that it was a long, but the seller was just too big. Now we wait for another decent setup.

Impala Platinum (IMP)

Boom! Three day low as a trailing stop for now. Maybe we see R220 this week?

Mondi (MNP)

MNP should be on your watchlist this week. You can put a tight stop on this and potentially get some good upside once this down trend breaks.

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 Trade ideas appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 (SPY)

We’ve seen the large rising wedge formation give a bearish break. Now price has moved below the 89 day moving average, which is a key medium-term trend indicator in our book. It is interesting to see that on Friday the market tested the 89 day moving average from the bottom, but failed to break above it. This rejection of a key trend indicator opens the 200 day moving average as a potential downside target.

Dow Jones Transportation Average (DTX)

DTX has lost the 200 day moving average support. This is a longer-term trend indicator in our book and it being broken is worrying for the bulls. The immediate downtrend line (white) could act as a potential buy signal, but until that happens, the trend is down.

Brent Crude Oil

Maybe our bias is too strong, or maybe the chart is just bullish… either way, Oil is looking good for a push higher.

Xtrackers Physical Rhodium ETC Fund (XRHO)

It’s getting close now. A break above the white trend line here would make a good buying opportunity in our view. Should XHRO break higher, it could be a catalyst for local PGM stocks to get moving as well.

Platinum Futures (PL1!)

Platinum might also be on the verge of finally breaking its recent down trend.

USDZAR

Very short-term view here, but the breaking of the yellow trend line could see the USDZAR strengthen to about R14.50.

Bitcoin (BTC)

The usual weekly logarithmic chart for crypto’s. Fairly bullish looking setup. Perhaps it’s finally time for the fourth quarter pump?

Ethereum (ETH)

Two nice looking candles for the bulls on ETH.

American Tower (AMT)

AMT has had a sharp selloff in recent weeks. The last time we saw such a fast and furious selloff it turned out to be a great buying opportunity. Early signs of shifting momentum supports the long trade idea here.

Peabody Energy (BTU)

I don’t know if you guys have seen coal prices in China… or that coal power plants around the world are shutting down due to a shortage of coal…? BTU mines coal. A whole lot of coal. Very decent long setup here as well. Me..? I like the stock.

VanEck Oil Services ETF (OIH)

It looks like the trend line break is playing out. You could probably see an inverse head and shoulders formation there as well if you squint hard enough. We’re looking for $240 as a target price.

South African trade ideas

JSE Top 40 (ALSI)

Looks like the ALSI bounced to retest the 57700 level and is set up to trade lower once more. Downside target is 53000.

Clicks Group (CLS)

CLS looks rather interesting. A reversal around R265 could provide a very high risk-reward long opportunity.

Impala Platinum (IMP)

Momentum wise it looks like IMP might be setting up for a bounce. If we see the two PGMs mentioned in the offshore trade ideas section above break higher, IMP could be a really good long from around these levels.

Mediclinic International (MEI)

MEI back to the bottom of the range?

Sanlam (SLM)

Looks like SLM is going to try break out of this range again. You can use a three day low as your trailing stop loss if you take this long trade.

Sibanye-Stillwater (SSW)

Very high risk-reward setup on SSW here. Once again dependent on PGMs in general, although the risk-reward is so great here it might just be worth taking a stab.

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.

Jonathan talks about Day Trading, what it takes and what his journey was. This was a very insightful chat and is highly recommended for anyone who is actively trading, or thinking about becoming very actively involved in markets.

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 Purely a technical perspective 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.

Offshore trade ideas

S&P 500 (SPY)

Alright, the rising wedge has broken. We note also that the SPY closed below the 50 day moving average on Friday. Next support levels come in at the 89 day moving average. Historically this zone between the 50 and 89 day moving averages has been a good ‘buying zone’. Will the buy-the-dippers win again, or will the macro headwinds actually lead to a larger scale correction this time?

Russell 2000 (IWM)

Range bound and going nowhere. At risk of sounding like a broken record… there is nothing to do here until this range breaks.

Dow Jones Transportation Index (DTX)

DTX is thoroughly testing the 200 day moving average. Often the DTX has been a leading indicator to other global markets. Things might get very spicy if the moving average support fails.

U.S. Dollar Index (DXY)

It seems that the DXY is going to have another crack at breaking the $93.50 level. As mentioned before, once DXY gets (and holds) above $93.50, we could see some turbulence in equity markets. A strong move here from the Dollar would put pressure on Emerging Market currencies and commodities.

USDZAR

Long-term trends take a long time to change. The USDZAR has once again made it above the 200 day moving average and the long-term trend change scenario is looking like it is firmly back on the table. As always the USDZAR will take its lead from the DXY, but as things look right now, we’re headed for R15.50.

Brent Crude Oil

The weekly oil chart still looks very constructive to us. Overall energy prices are looking very bullish heading into what is expected to be a cold winter in the northern hemisphere.

South African trade ideas

JSE Top 40 Index (ALSI)

The range break trade is off to a good start. We see support around 55500, 54650 and 53000.

Aspen Pharmacare (APN)

We’ve closed our APN CFD long trade. Perhaps a bit early, but we had a great run on this stock so we were happy to bank. We are still happy holders in the long-term equity portfolio.

Brait SE (BAT)

Higher risk play here, but BAT finally broken higher. As more and more people around the world are getting the vaccine, it appears that we are one step closer to that ever illusive ‘back to normal’. Keep an eye on global mobility tracking data. As people more around more, they will eventually end up back at the gym and then finally BAT might have its moment in the sun.

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.

We only managed to cover about half of your questions last week, so we will be doing part 2 this coming week. Again, if there is anything that you would like to learn about, please feel free to retweet and ask!

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 It might get a little bumpy appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 (SPY)

It is rather challenging to tell signal from noise here right now. The key here is to discern whether or not this is a technical sell signal, or if this is just another dip that we should buy. We are looking at this chart in a number of different ways;

Weekly chart
The dotted, lower boundary of the rising wedge is plotted using the weekly real body closes. Very strictly speaking, it has triggered the sell.

Daily chart
The dashed, lower boundary of the rising wedge is plotted using the candlestick tails on daily candles. Now it appears that there has been no sell signal triggered yet.

An interesting perspective from ZeroHedge.com

The Pavlovian investor has been taught to buy the dip, but will it work going forward just because it has worked well so far? That is the question many investors are asking themselves at the moment. The current market psychology is extremely complex as the crowd has been rewarded with one behavior; buy the dip. There is a risk of the general investor about to suffer from cognitive dissonance.

Cognitive dissonance is the distressing mental state that people feel when they “find themselves doing things that don’t fit with what they know, or having opinions that do not fit with other opinions they hold.” A key assumption is that people want their expectations to meet reality, creating a sense of equilibrium. Likewise, another assumption is that a person will avoid situations or information sources that give rise to feelings of uneasiness, or dissonance.

Investors know that the market behaves like a cork in water; it always comes back up. Lately the market corrections have been smaller, both in terms of magnitude and time, i.e the buy the dip has been reinforced. Let’s see if those that have bought this last dip will find themselves in the same position as Pavlov’s dogs, waiting for the ringing of the bell, but no meal is following.

ZeroHedge

The question we are asking ourselves now is; do we need to hedge out a potential 10% to 20% correction, or will the market bounce from here?

Inverse S&P 500 ETFs (SH, SDS, SPXU)

If you’re also thinking that it’s time to hedge portfolios, potential hedging candidates include; SH (1x gearing), SDS (2x gearing) and SPXU (3x gearing), which will all rally if/when the SPY comes down. You will need to calculate your portfolio’s beta to the SPY, then work out how much inverse/negative exposure you will need in order to reduce your portfolio’s beta to 0.

Russell 200 (IWM)

This long consolidation period is starting to look like a long-term distribution pattern. For now, there are still no signals on this market. We would be very concerned if the lower range boundary is breached though.

Dow Jones Transportation Index (DTX)

Earlier this year we’d mentioned a bullish break from a bull flag formation on DTX. It has become clear that the bull flag formation is failing and the DTX has failed to make any significant attempt at a new high. It is now fast approaching the 200 day moving average. Failure of the 200 day moving average to hold could be another major sell signal for the broader market.

Brent Crude Oil

The oil chart is one that we have been bullish on a whole a lot over the last year or so and we continue to be bullish. After it finally retested (and bounce off) the primary trend line, it seems that it is gearing up for another leg higher in the coming months. Overall the market is not without its challenges, although rising geopolitical tensions, hurricanes and rising demand are keeping the oil market in a state of ‘undersupply’. Thus we remain bullish and keep looking for opportunities to take long trades in Oil.

South African trade ideas

JSE Top 40 Index (ALSI)

Well, would you look at that? After around six months of consolidation, the range has finally broken to the downside. Is it time to hedge local portfolios as well?

Sanlam (SLM)

Our SLM short from last week is working rather well so far. We’re happy to move our stop loss to just below entry, basically making the rest of this trade ‘risk free’.

Sasol (SOL)

SOL looking like a decent bullish setup here, especially with a bullish oil backdrop.

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.

Next week we will be taking some of your questions. So if there is anything that you would like to learn about, please feel free to retweet and ask!

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 Time to hedge portfolios? appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 (SPY)

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

Dow Jones Transportation Index (DTX)

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

U.S. Dollar Index (DXY)

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

USDZAR

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

South African trade ideas

JSE Top 40 Index (ALSI)

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

Shoprite (SHP)

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

Anheuser Busch Inbev (ANH)

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

Compagnie Financiere Richemont (CFR)

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

Mediclinic International (MEI)

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

MTN (MTN)

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

The Foschini Group (TFG)

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

Telkom (TKG)

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

Joining HCA trading

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

Local stockbroking rates

Offshore stockbroking rates

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

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

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.

Offshore markets

S&P500 (SPY)

Seven new all time record highs in a row… a pretty rare occurrence historically, and also one that has proven to be a reliable bullish indicator. While markets do not go up in a straight line and it is generally advisable to wait for a pullback to ‘buy the dip’, as they say, it is also not wise to trade against what is clearly a very strong trend. Two weeks ago we said ‘buy the dip’, last week we said ‘follow the trend’, now we say ‘hold on and be patient’.

Nasdaq (QQQ)

A breakaway gap pushing an all time high… bullish. Sure, things don’t go up in a straight line forever, but standing in front of a freight train going full speed will only get you flattened. The thing to do now is to hold onto the longs and be patient. Trailing stop losses are always useful in these situations.

Dow Jones Industrial Average (IYY)

Another U.S. equities index, another breakaway gap to an all time high. Despite all the worry out there, U.S. markets are looking strong. We’d not be surprised to see a week or two of slow upward grind here from U.S. markets before any buyable dip emerges. Now is a time to look around for things we want to buy when next we get a chance.

Russell 2000 (IWM)

Well ok, it’s not all sunshine and roses. The IWM has not made new highs for some time now. Perhaps some cold water, but on Friday overall U.S. market breadth reading was: 43% advances, 50.2% declines and 6.8% unchanged. Counted as individual stocks rather than percentages, that’s 3,794 advances, 4,429 decliens and 597 unhanged. So while most of the major indices are in a very bullish configuration, most of those decliners come from the smallcap space. Thus, seeing a bullish break on the IWM would be supportive of the bullish breakaway gaps in the larger-cap indices shown above. Should we see the larger-cap indices keep pushing higher, while IWM trades towards the lower end of its current range, there might be some reason for concern and heightened caution.

Dow Jones Transportation Index (DTX)

Over the last few weeks the DTX has not participated in the upside enjoyed by industrials and tech. The DTX has however pulled back to test both the 89 day moving average, as well as the current primary uptrend line. We think that it offers a good long entry here, using the current primary uptrend line as a trailing stop loss.

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.

Gold

Gold is looking a little dicey at the moment. Looking at the weekly chart, we see that it tried to break out of the recent downtrend, although failed gloriously. The 89 week moving average is holding well as support for now, but where to from here is not something we are willing to place a wager on right now. We’ll just be casual observers of this market for now.

Brent Crude Oil

Weekly chart on Brent Crude Oil. Not much to do but to hang on to the energy longs and be patient. The trend is strong with this one.

U.S. Dollar Index (DXY)

Not too much has changed on this chart over the last week. For now the potential trend change is still on the table and we would still like to see a move above $93.50 to confirm.

USDZAR

R14.50 put up a fight and it seems that the momentum is starting to swing toward bullishness again. As is the case with the DXY above, we can’t make any new calls here until we have some further clarity in terms of the potential trend change. Also, let’s be honest… this whole Zuma splitting the ANC in two situation that is happening right now, could be an unforeseen risk with an unknown impact. Also, if you squint your eyes just right, can you see an Inverse Head and Shoulders there?

Bitcoin (BTC)

And so another week passes and yet again the support holds… We have to admit, this is making us more and more bullish.

Ethereum (ETH)

ETH is an entirely different animal compared to BTC, but even so, it is looking mighty bullish in our view. ETH is also holding a key support level and we think that FOMO driven madness is yet to begin.

South African markets

Aspen Pharmacare (APN)

When looking at the weekly chart, it is interesting to see that the 200 week moving average has been putting up a fight for a few months already. We remain trend followers here and think that once both the overhead resistance and the 200 week moving average is broken, we should see APN testing the upper end of this channel around the R180 – R185 mark.

When looking at the daily chart, we can see that momentum is starting to turn a little more bullish again. Maybe this is the week that we see APN break and hold above the resistance?

NewPlat ETF (NEWPLT)

It may be a little late to get the best possible entry into this ETF, but from the looks of the current weekly chart then trend is changing and we want to be long.

Blue Label Telecoms (BLU)

BLU has been trading the range for a few months. If the big can hold above R4.80 in size, it might be worth lifting.

Gold Fields (GFI)

Some ‘hopium’ for the gold bugs. GFI has found good support around here in the past and momentum is turing bullish. Perhaps we see a bounce to R170?

Naspers (NPN)

NPN has been holding this support for a good while now. If this level breaks downward, it might get very messy very quickly (but probably also provide the best buying opportunity in this stock in many years – for the brave and the patient that is).

Technically there are four potential trades on the table here; 1. buy the bottom of the blue range with a stop loss below R2900, 2. sell the bearish break of the blue range and cover on bounce, 3. wait for a bullish break of the blue range and buy into strength with an eye on the previous highs as a price target or, 4. in the event of a bearish break of the blue range, wait for maximum panic to grip the market and try get a long-term long position on at a much lower price. How you play it is up to you.

*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 Be patient and hold the longs appeared first on Herenya Capital Advisors.