In terms of execution, we closed an equal number of winning and losing trades. However, the key takeaway from this week’s performance is that our average loss was larger than our average profit. To maximize long-term portfolio growth, our primary focus remains ensuring our risk-to-reward ratio stays skewed in the other direction. We are fully confident that as long as we remain disciplined, stick to our trading plan, and refine our execution based on these lessons, the numbers will continue to track in the right direction.

Last week

Macro Catalyst

The main drivers of market sentiment this week were the latest US PCE inflation data and Non-Farm Payrolls (NFP) figures. Both PCE and NFP came in softer than anticipated, sparking renewed hope that the Federal Reserve may pause rather than hike interest rates at its upcoming late-October meeting. Locally, the Rand experienced sharp pressure on Thursday, with a notable sell-off driving USD/ZAR up toward the 16.74 level.

Closed Trades (Take Profit)

Compagnie Financière Richemont SA (JSE: CFR)

• Trade Logic: We identified a head-and-shoulders top formation on the daily chart and initiated a tactical short position to capture the downside.
• Status: Shorted at R3,539.13. Closed at R3,437.71.

Nedbank Group Ltd (JSE: NED)

• Trade Logic: Having been stopped out on a previous short attempt, we re-entered a short position; partly to act as a tactical hedge against our FirstRand long. This hedge provided valuable downside protection during Thursday’s banking sector weakness. With the stock rebounding on Friday, we locked in gains for a modest profit.
• Status: Shorted at R289.32. Closed at R285.50.

Capitec Bank Holdings Ltd (JSE: CPI)

• Trade Logic: We initiated a tactical short alongside NED to further hedge our FSR exposure, aiming to capitalize on post-earnings volatility. The stock bounced strongly on Friday, leading us to close near breakeven.
• Status: Shorted at R4,398.98. Closed at R4,363.24.
• Key Lesson: He who hesitates is poor. We wanted to close the trade very shortly after the market open on Friday, but hesitated and only ended up closing it for a small profit.

Thungela Resources Limited (JSE: TGA)

• Trade Logic: Following several consecutive sessions of aggressive selling without stock-specific negative news, Thungela has begun forming a stable consolidation base. We opened an initial 1/3 tranche long position, targeting a rebound just below R125.00.
• Status: Bought at R115.01. Closed at R124.96.

Active Open Trades

BHP Group Ltd (JSE: BHG)

• Trade Logic: BHP continues to trade within a defined channel between R680.85 and R754.58. Anticipating that a recovery in iron ore prices will support upward momentum, our price target remains the upper channel bound around R754.00.
• Status: Active. Bought at R701.05. Currently showing a small unrealised profit after a fairly good week.

Thungela Resources Limited (JSE: TGA) (Remaining 2/3 Tranche)

• Trade Logic: Along with Exxaro, Thungela experienced a few sharp days of decline. With a firming US Dollar, we anticipated that the stock would benefit from hard-currency tailwinds.
• Status: Active. Bought at R121.80. Currently showing a small unrealised profit.

Exxaro Resources Ltd (JSE: EXX)

• Trade Logic: Exxaro stands as a key beneficiary of a firming US Dollar and higher coal prices. 
• Status: Active. Average Entry at R196.83. Currently trading at an unrealised loss. Exxaro paid out a R7 dividend this week which has cushioned the blow slightly and experienced its first good day since going Ex-Div. 

Compagnie Financière Richemont SA (JSE: CFR)

• Trade Logic: After taking profit on our short position as the head-and-shoulders played out, we identified a clean technical bottoming pattern and reversed position to go long; a move that has yielded strong results alongside recent Rand weakness.
• Status: Active. Bought at R3,435.01. Currently showing a modest unrealised profit.
• Key Lesson: Have your Take Profit order in. We could have been out on the fat finger that pushed it above R3,608.00.

Mondi plc (JSE: MNP)

• Trade Logic: Morning call trade recommendation based on a bullish flag-and-pole continuation pattern.
• Status: Active. Bought at R183.00. Mondi experienced a stronger showing last week before pulling back slightly. Crucially, it has not broken recent lows, preserving the possibility of a trend reversal as we hold the position.

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

• Trade Logic: Reinet continues to trade at a substantial discount to its underlying net asset value (NAV).
• Status: Active. Bought at R447.00. Price action remains range-bound. We are managing position size while remaining positioned for Reinet’s historical tendency toward rapid NAV catch-up rallies.

Truworths International Limited (JSE: TRU)

• Trade Logic: Truworths was trading at a major historical support level that has repeatedly held over recent sessions. We initiated a long position to capture a technical bounce off this level.
• Status: Active- Bought at R42.31. Showing a small profit. 

Closed Trades (Stop-loss)

Anheuser-Busch InBev SA/NV (JSE: ANH)

• Status: Closed at a loss | Bought at R1,304.49 | Sold at R1,236.96.
• Details: Initiated as a defensive hard-currency allocation. While Anheuser stands to benefit structurally from Rand weakness over time, sharp downside momentum triggered our stop loss, preventing further drawdown as the stock continued to slide.

Discovery Ltd (JSE: DSY)

• Status: Closed at a minor loss | Bought at R264.14 | Sold at R264.80.
• Details: Discovery broke its primary downtrend line, signalling a prospective reversal. However, price action stagnated in a sideways range while accumulating overnight swap holding costs. We elected to close slightly above our price entry, resulting in a minor loss net of brokerage and financing fees.

FirstRand Ltd (JSE: FSR)

• Status: Closed at a loss | Average Entry at R95.08 | Sold at R88.94.
• Details: We originally went long on a bull flag breakout. As sector-wide selling pushed the stock lower, we added a second position anticipating a value bounce. With persistent banking weakness breaching our risk tolerance, we closed both tranches to reallocate capital toward higher-conviction setups.

Mr Price Group Ltd (JSE: MRP)

• Status: Closed at a loss | Shorted at R160.51 | Sold at R167.50.
• Details: Initiated as a tactical short breakdown play. Price action consolidated in a horizontal range for several sessions before moving higher to trigger our stop loss. Positively, accrued positive swap interest offset the execution fees.

Thoughts on the week ahead

Looking ahead to next week, we have several notable upcoming dividends on the calendar alongside a fairly quiet corporate earnings slate for the JSE, so we expect broader market volatility to remain relatively muted. Among the stocks going ex-dividend is FirstRand (FSR). Although we recently closed our active FirstRand position to limit overnight financing costs (swaps) and guard against further downside risk, we still believe the stock holds the potential for a rapid short-term rally. We are keeping a close eye on the setup to re-enter strategically and capture any sudden upward momentum.

Primary attention for the week will be centered on Thungela Resources (TGA) and Exxaro Resources (EXX). Thungela has established a solid support base following a strong upward push, and if historical sector correlation holds true, we anticipate Exxaro should follow shortly with a similar catch-up move.

Economic Data

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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 Thungela Time appeared first on Herenya Capital Advisors.

Nonetheless, we understand that that is the nature of trading. You can’t always be on the winning side of every trade and sometimes you are just plain wrong. We stay disciplined and follow our rules. We understand that the distrinbution of winning and losing trades are essentially random, and that consitency is the result of discipline and consitency of approach.

That said, the past week proved to be a challenging trading environment. Price action across several sectors diverged from expected macro moves, with select stocks experiencing sharp intraday pullbacks on minimal company-specific news. We attribute much of this localized volatility to the quarterly FTSE/JSE Top 40 index rebalancing, as significant volume execution occurred during the closing auction. While our active book is currently carrying larger unrealised losses, our long-term fundamental and technical conviction in these holdings remains intact. We are comfortable maintaining these positions to allow the underlying trade theses to play out. 

Last week

Macro Catalyst

The primary catalyst driving global markets this week was the Federal Reserve’s decision to increase interest rates by 25 basis points. Additionally, Fed Chair nominee Kevin Warsh maintained a distinctly hawkish tone, leading markets to price in a high probability of another 25-basis-point rate hike before year-end.

Closed Trades (Take Profit)

Harmony Gold Mining Co Ltd (JSE: HAR)

• Trade Logic: We held tactical short positions across gold and select precious metal equities in anticipation of downside pressure driven by higher interest rates and a hawkish Fed tone. While broad PGM/Gold momentum proved resilient, our trailing stop protected capital to secure a modest gain on the cover.
• Status: Shorted at R328.96 | Closed at R326.27. Realised a minor profit (+0.82%).

Active Open Trades

Nedbank Group Ltd (JSE: NED)

• Trade Logic: NED has completed a clean head-and-shoulders top formation, indicating potential downside expansion. We have initiated a tactical short position expecting the share price to continue its downward trend.
• Status: Active | Shorted at R292.75 with a tight protective stop loss.

BHP Group Ltd (JSE:BHG)

• Trade Logic: BHG is trading between a range of R680,85 and R754,58. Hoping that the bounce in iron ore prices would also help with the move up, our aim is the upper channel of around R754.
• Status: Active | Bought at R701.05. 

FirstRand Ltd (JSE: FSR)

• Trade Logic: FSR formed a clean bull flag pattern and confirmed a technical breakout, triggering our initial long entry.
• Status: Active | Initial Entry at R96.00. Position is currently at an unrealised loss following sharp, news-less weakness early in the week. Conviction remains high.
• Position Addition: Following unjustified selling pressure on Monday and Tuesday, we viewed the pullback as overdone and added a secondary half-position at R93.86 to lower our average cost basis.
• Key lesson: If there is a massive jump on a day for a stock (in this instance 10/09/2026), it’s best to take that as a sign from the market telling you to take your money and go. We did not listen last week, and now we are paying the price. Thankfully FSR is holding a key support level, so we can probably trade our way out of trouble here.

Anheuser-Busch InBev SA/NV (JSE: ANH)

• Trade Logic: Initiated as a defensive hard-currency allocation. Alongside Exxaro, ANH benefits structurally from Rand weakness against the US Dollar.
• Status: Active | Bought at R1,304.49. Experienced a ~2.3% pullback on Friday, but remains above our stop-loss threshold. Holding active.

Exxaro Resources Ltd (JSE: EXX)

• Trade Logic: Exxaro carried strong upward momentum into the week and stands as a key beneficiary of a firming US Dollar. Following an aggressive two-day pullback after our initial entry near local highs, we added to the position at Thursday’s lows.
• Status: Active | Initial Entry at R204.00. Currently trading at an unrealised loss.
• Position Addition: Added a secondary position at R190.15.

Mr Price Group Ltd (JSE: MRP)

• Trade Logic: Carried over from two weeks ago. MRP continues to trade within a tight horizontal range, characterized by alternating gap-up opens and lower closes.
• Status: Active | Shorted at R160.51. Currently at a slight unrealised loss.

Compagnie Financière Richemont SA (JSE: CFR)

• Trade Logic: CFR completed a distinct head-and-shoulders top formation. We initiated a tactical short position targeting further downside expansion.
• Status: Active | Shorted at R3,539.13. Currently showing a modest unrealised profit. Stop loss has been adjusted lower to account for the recent dividend adjustment.
• Key lesson: We took a half position on this stock as we were slightly nervous after having to realise some losses. Always be confident in your trades and take valid setups without hesitation. Having the memory of a goldfish helps too.

Mondi plc (JSE: MNP)

• Trade Logic: Morning call trade recommendation based on a bullish flag-and-pole continuation pattern.
• Status: Active | Bought at R183.00. Price action is gaining momentum and beginning to break higher out of consolidation, but not yet where we want it to be. 

Discovery Ltd (JSE: DSY)

• Trade Logic: Initiated following a breakout above its long-term downward trendline. The stock has successfully retested former resistance as support without breaking down.
• Status: Active | Bought at R264.14. Showing a slight unrealised gain. We remain patient as the price builds structure toward our profit target.

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

• Trade Logic: Reinet continues to trade at a substantial discount to its underlying net asset value (NAV).
• Status: Active | Bought at R447.00. Price action remains range-bound. We are monitoring position sizing while remaining positioned for Reinet’s historical tendency toward rapid NAV catch-up rallies.

Sibanye-Stillwater Ltd (JSE: SSW)

• Trade Logic: Initiated a long position as precious metals demonstrate unexpected underlying resilience despite elevated interest rates and hawkish policy signals.
• Status: Active | Bought at R47.40. Holding for upside continuation.

Closed Trades (Stop-loss)

Growthpoint Properties Ltd (JSE: GRT)

• Status: Closed at a loss | Bought at R16.07 | Sold at R15.69.
• Details: Entered near channel support. Downside intraday volatility triggered our stop loss before the stock staged a minor recovery back above key horizontal level.
• Key Lesson: Stop-loss placement could have been cushioned slightly wider to absorb short-term index rebalancing noise. 

Pepkor Holdings Ltd (JSE: PPH)

• Status: Closed at a loss | Bought at R19.72 | Sold at R18.95.
• Details: Entered on a bullish reversal candle signal. Downside momentum resumed, triggering our protective stop loss to preserve capital. We were happy to be closed out of this one as it kept declining. 

Impala Platinum Holdings Ltd (JSE: IMP)

• Status: Closed at a minor loss | Sold at R237.63 | Bought at R238.10.
• Details: Tactical short initiated alongside HAR. Volatility around macro announcements moved against the position, triggering our stop loss just above entry. Exiting proved prudent as PGM spot prices continued to push higher.
• Key Lesson: If it seems like your stop loss is going to be hit at market open, it might be best to remove it and let the volatility pass, before you put it back. This has happened to us a few times now, where we could have potentially made a small profit or let the trade run more. 

Spot Gold (XAUUSD)

• Status: Closed at a loss | Shorted at $4,318.36 | Stopped out at $4,372.01.
• Details: Positioned short expecting hawkish Federal Reserve messaging to pressure bullion. While post-event commentary was hawkish, intense intra-announcement volatility triggered our stop loss immediately prior to the press conference.
• Key Lesson: Adjust your stop loss accordingly based on high volatility scenarios. Same as with an opening auction, the last thing you want, is for your stop loss to be hit, and the market reverses. 
• Disclaimer: Tactical intra-day scalps on gold during the Fed statement yielded a minor offsetting profit.

Conditional / Setup Watchlist

Woolworths Holdings Ltd (JSE: WHL)

Trade Logic: WHL is set to be removed from the FTSE/JSE Top 40 Index in the upcoming quarterly rebalance, with Aspen Pharmacare Holdings (APN) replacing it. While the stock has staged a minor technical bounce over recent sessions, we anticipate near-term downside pressure driven by forced index-tracker selling during the rebalancing auction. We are positioning to capitalize on this temporary index flow dip to establish a long entry at discounted levels. Historically, stocks excluded from the SA Top 40 tend to stage a solid relief rally in the days to weeks following the rebalance event once institutional selling pressure abates.

Thoughts on the week ahead

Well, we took a few blows in the week past, but overall we survived. In the week ahead we will stay focused on our process and trading rules and mostly ignore the news. There is not much on th radar in terms of macro events anyway. The biggest news would probably be Chinese interest rates on Monday, where surprise commentary could move commodities. Other than that there is a Fed speaker on Tuesday, some European PMI’s on Wednesday and a slew of smaller Central Bank rate decisions on Thursday. These could move markets if there are big surpises, although for now, at least from our perspective, there is nothing for us to really watch out for or plan around.

We will be keeping an eye out for what the local market does now that the index rebalancing is done and forced buying and selling it out of the system. Also, gold has been very interesting in the sense that it did not respond to what we thought the most probable reaction would be to higher interest rates from the US last week. Thus, we will be watching if there is a rally in the metal and will likely try hop on board any momenetum that arisises in that space.

And hopefully, no more humble pie.

Economic Data

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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 Humble Pie appeared first on Herenya Capital Advisors.

Today, we looked at 13 charts; below are only some of them, but first, let’s have a look at the overnight moves. Commodities have taken a hit, with silver being the most affected. In the case of silver, it would seem that this is just profit-taking, as we see no news headlines that can confidently explain the selling, especially given the conflict in the Middle East, which would normally drive buying in safe havens. Oil has managed to hold up overnight, gaining 2.61%.

S&P 500 Index

Yesterday, we saw our level of 6,800 get tested as we dipped slightly below, but did manage to come back up, and we even closed near the highs of the session, which indicated that perhaps the market does not expect the situation in the Middle East to last very long or that the worst of it has already passed, however, this morning we are lower than where we ended last night, which is understandable given volatility being so high, but we cannot have any expectations as to how the market reacts given this time of uncertainty. We suggest waiting for headlines and seeing how things play out if we are going to keep going down or bounce back up. We are currently looking at 6,800 as a level of support, then 6,850, and 6,950 for resistance. The next support after 6,800 would be 6,750 for a swing-low.

Nedbank (NED)

Nedbank had earnings and came out with pretty decent numbers, but we are already trading at swing highs already, which makes it difficult to gauge direction exactly. A lot of the participants in today’s session will have been drawn in by the news, and it will not be surprising to see some more selling in today after the recent strong move up, as people take profits. We will have to wait and see how this one trades this morning, and if the buyers can hold. We recommend watching Nedbank today.

KOSPI Composite Index

Let’s have a look at the Korean market, which has been doing extremely well as of late. KOSPI has seen its first big red day in recent months, down 7.24%. This really stands out to us as this could be an opportunity for retracement down into 5,400, as we think it’s currently a little overextended. Hong Kong Tech normally goes hand in hand with KOSPI, but currently, they are out of sync, so there is some catching up to do with this market in terms of the tech sector, as they are more tech inclined.

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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 The Daily Trades 03/03/2026 appeared first on Herenya Capital Advisors.

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

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

Offshore trade ideas

S&P 500 (SPY)

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

Russell 2000 (IWM)

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

Nasdaq (QQQ)

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

Dow Jones Industrial Average (IYY)

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

Dow Jones Transportation Average (DTX)

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

U.S. Dollar Index (DXY)

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

USDZAR

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

Gold

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

Brent Crude Oil

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

VanEck Vectors Gold Miners ETF (GDX)

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

Wells Fargo (WFC)

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

Energy Select Sector SPDR Fund (XLE)

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

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South African trade ideas

Aspen Pharmacare (APN)

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

Coronation Fund Managers (CML)

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

Discovery (DSY)

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

Truworths (TRU)

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

ABSA Group (ABG)

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

Bidvest (BVT)

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

Gold Fields (GFI)

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

MTN (MTN)

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

Nedbank (NED)

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

The Foschini Group (TFG)

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

Joining HCA trading

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

Local stockbroking rates

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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 Focus on the charts appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 (SPY)

All time record high on the SPY. The trend is up and $430 is but a stone’s throw away.

Russell 2000 (IWM)

Bullish break of the pennant formation. No new high yet, but it’s looking good for the push to $240.

Nasdaq (QQQ)

Key resistance broken. No new high yet, although it’s looking good for the move to $330.

Dow Jones Industrial Average (IYY)

Another record high close.

U.S. Dollar Index (DXY)

$90.50 resistance is putting up a fight, but overall it is looking good for the move toward $92.

USDZAR

Weekly chart.
The moment of truth… does it bounce back to R14.50 from here?

Bitcoin (BTC)

The $35k level has now held for four weeks. Perhaps we see it bounce up to $50k in the coming weeks? Long positions taken here can use a weekly stop loss below $35k.

Ethereum (ETH)

ETH is also holding its support. We still like the long position here with a weekly stop loss below $2040.

Gold

Gold is a little tricky here. At first glance it looks to be finding resistance and potentially setup up for a move back toward the bottom end of the range (at $1675-ish). The flipside here is that the inflation narrative will be a bullish driver for Gold. That said, it seems that the market is convinced that inflation is here to stay. Unless there is a change in sentiment toward inflation, Gold will likely drift towards the lower end of the range. With an eye on the bigger picture, we think that taking / increasing Gold exposure at the bottom of the range would be a great opportunity. For now, patience is key.

Brent Crude Oil

Oil is trending up and has broken recent highs (and resistance). $75.30 incoming.

South African trade ideas

DRD Gold (DRD)

Our comments on Gold above refer.
DRD is looking very interesting for a longer-term equity entry here. The ideal entry was on the break of R15.69, although between R16.50 – R17.50 could be a good entry as well. DRD is ticking all the boxes for a long-term trend change. In the short-term, should Gold come under some pressure, DRD could come under fire as well. For the longer-term trader, perhaps taking some exposure here with the view to add more if DRD drops to R15.69 support again would be a prudent gameplan.

Mediclinic (MEI)

MEI range broken. Last time it faked out, so some caution is necessary. This time around though, it was a slower, more consistent grind to get and hold above the resistance level. A long position here offers an attractive risk-reward.

Mondi PLC (MNP)

MNP could bounce off the 200 day moving average here. The long trade will be triggered on a daily close above the blue downward sloping trend line. Aggressive traders could try get in on a 1 hour close above the trigger line. Stop loss below R360.

Nedbank (NED)

We’ve been tracking NED for a long while now. It is probably wise to take off most of your long position here and keep a small portion on a trailing stop loss.

Netcare (NTC)

NTC broke out of the range and is looking good for that long-term trend change trade.

Sanlam (SLM)

SLM back at the top of its range. Our bias is bullish, although we need to wait for a confirmed breakout of the range.

Truworths (TRU)

TRU finally got clear of the channel resistance. Now it looks like it is making a flat top triangle. Stop loss at R54.

Woolworths (WHL)

We’re looking for a bullish break from this little range on WHL.

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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 Follow the trend 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)

Alright, so we wanted new highs and we got new highs. Where to from here? Looking at this chart right now, we actually don’t have a view on the SPY. The last daily candle signals indecisiveness on this instrument, which is sort of how we feel about it right now too. Perhaps it is time to clear this chart of all drawing tools and relook at it with a fresh perspective in the new week? Momentum wise, SPY is still looking strong. Our target is still $420.69. Patience is key.

Philadelphia Semiconductor Index (SOX)

We’ve mentioned before that we consider SOX a bit of a leader to QQQ, so we’re watching carefully for a potential turnaround here. You’ll notice further below that most major U.S. indices are looking rather bullish. Thus, we need to be patient with any thoughts of bearishness and allow the market to direct our actions. That’s a very long way of saying that the range indicated on the SOX chart below could offer a nice against the trend entry. Bullish momentum seems to be fading a little and the market might be gearing up for a bit of a pull back. That said, we will trade a break of this index ETF in any direction. In other words, either a bullish or bearish break from that range is worth trading. Whichever way this index goes, patience is key.

Dow Jones Transportation Average (DTX)

DTX has also gone a little flat over the last week. We also note that here too, momentum is starting to shift towards the bearish side of things. Perhaps it’s time for DTX to test the 50 day moving average again?

Russell 2000 (IWM)

We looked at a badly drawn Head and Shoulders pattern on IWM last week, which would probably take it down to the blue trend line if it does play out. This week though we note that the MACD has generated a buy signal and that price might just have broken out of a pennant formation. For now, this creates a great risk-reward long trade. Stop loss below $215.

Nasdaq (QQQ)

A nice clean break to new highs on QQQ. There is only really one trade to do here, which is long with a stop loss under $338.

Brent Crude Oil

Although the last two daily candles are not the most bullish, we do have a clear break of a tertiary down trend, complimented by a full range of buy signals on the momentum oscillators. We are bullish on oil and will use weakness as an opportunity to take long trades. Perhaps one more test of the 50 day moving average before the push to the $69 to $71 region?

Palladium

A very nice clean break here on Palladium. This bullish break is going to be supportive of PGM stocks.

Gold

Gold is bouncing well off the support level. It looks at is $1848 is very likely to be tested in the coming weeks. The real question is whether or not this is the start of a longer-term trend change?

U.S. Dollar Index (DXY)

DXY is still channel bound. A break from this channel should offer a good trading opportunity, although we need to be a little patient to see which way it wants to go. Those who like risk could probably take a long here with a very tight stop loss with aim set on the upper end of the channel. For the less risky traders, patience is key here. The more responsible way to trade this would be to wait for a confirmed break.

USDZAR

The support failed and the ZAR firmed up. It appears that the down trend (strengthening Rand) is here to stay for some time after all. It is interesting to note though, that the most recent two daily candles forms an harami candlestick formation. Generally, this is a reversal signal. Do we see the USDZAR bounce to test the support level before continuing the down trend? You’re welcome to leave your thoughts in the comments below.

Bitcoin (BTC)

First, perspective:

Then, looking at the chart; the bullish break from the triangle shown last week seems to have failed. This opens BTC to the possibility of a pullback to around the $35k region. As crazy and as scary as that sounds, it would not be historically out of the ordinary for BTC. We remain very bullish on BTC for the remainder of 2021 and continue to anticipate considerably higher prices, thus we welcome a pullback and aim to use it as a buying opportunity.

Ethereum (ETH)

ETH also had a bit of a failed break. Once again, weakness here would be treated as a buying opportunity for us. Just keep in mind that cryptocurrencies are wildly volatile, so it is best to trade it, or buy it, without the use of leverage on a trusted exchange like VALR.com.

Dogecoin (DOGE)

Destination moon! We’ll do another dedicated post about cryptocurrencies in the coming weeks. In the meantime, so far our Which cryptocurrency to buy in 2021 post is aging well.

South African trade ideas

JSE Top 40 Index (ALSI)

The ALSI is looking rather bullish here. It’s making higher highs and has a full range of buy signals on the momentum oscillators. The trend is strong with this one.

ABSA Group (ABG)

ABG is still in a nice up trend. The highest probability entry was the break above the 50 day moving average on Thursday, although it would seem that there is still some upside left before it runs into resistance around R136.

AECI (AFE)

AFE has bounced out of the buying zone. The trend is your friend and patience is key. We could be in this trade for a good few weeks.

Anglo American PLC (AGL)

The AGL move as made it up to the previous high. A trailing stop loss from here would be the best way to manage this trade.

Anglo American Platinum (AMS)

Piercing line candlestick formation, along with early signs of a bullish momentum shift with a proper backwind from Palladium. AMS, and other PGM stocks, are looking solid for longs in the week ahead.

AngloGold Ashanti (ANG)

Gold stocks in general are on the hot list for next week. Should ANG get above the 50 day moving average, it should easily break the day moving average as well. We’d like to see ANG break above R350 and make a run for R400.

Anheuser Busch Inbev SA (ANH)

ANH above the 89 day moving average (R980) could make a run for R1100.

Astral Foods (ARL)

ARL has broken above both the short-term and long-term moving averages. The brief pullback after the breakout was ended with a bullish engulfing candle. Stop loss below the swing lows which can be changed to a trailing stop loss once ARL breaches R165. Liquidity is sometimes an issue here though, so trade it small.

BHP Billiton (BHP)

BHP is still lagging behind AGL. Momentum wise, BHP is starting to look better. Once BHP has traded up to R480, we’ll switch to a trailing stop loss. Patience is key though, we need to give this trade the time it needs to work.

BID Corporation (BID)

BID is looking really good. Also a somewhat illiquid stock to trade, but a long here with a stop below R280 could work out well.

Compagnie Financiere Richemont (CFR)

The CFR breakout is off to a great start. A nice clean break and back test. Bullish momentum boxes are also ticked.

Capitec (CPI)

We’re still long CPI with our initial target at R1495. A stronger ZAR and general risk-on sentiment should be supportive of this trade.

DRD Gold (DRD)

DRD is looking really good for a long entry above R14.72. Perhaps the BTC shock over the weekend will drive the Gold price higher, which will play into the hands of gold stocks. DRD presents a really high risk-reward long trade here.

Discovery (DSY)

DSY is looking really good as well. Momentum starting to fire off buy signals, the range has broken. Once it gets above the moving averages, we think it trades up to R155 (first target). DSY looks like a simple trend following trade here.

Exxaro (EXX)

EXX broke overhead resistance around R180 for the third time. This time around though, the previous resistance, now support, has been tested twice without failing. This presents a high risk-reward long trade.

FirstRand (FSR)

Our FSR trade was almost stopped out, but seems to be back on track (and in the money) once more. We note now that the MACD has given a buy signal and a few more green days will likely see the MACD line cross over 0, which will reinforce our bullishness on FSR.

Gold Fields (GFI)

This consolidation above the 50 and 89 day moving averages, paired with our bullish view on Gold itself, makes for a decent long trade on GFI. Initial target is R159, then R170. Should Gold manage to change it overall trend, we could see GFI up at the R250 levels again in a few months.

Glencore (GLN)

GLN is showing some bullish divergence and both the MACD and Stochastic oscillators have triggered buy signals. Logn trades from here can have a stop loss below R57.

Growthpoint Properties (GRT)

GRT is holding above the longer-term moving averages rather well. We continue to think that local property stocks are offering value at the moment. Longer-term traders and investors could consider adding GRT to their portfolios at current levels.

Harmony Gold Mining (HAR)

Following the narrative of Gold and gold stocks in general, we like HAR for a long trade with an eye on the R80 level as a potential target.

Impala Platinum (IMP)

IMP will no doubt benefit from the Palladium (breakout) rally. The trend is very strong here. Hard stop loss below the swing low (also the 20 day moving average) which can be set to a trailing stop once in the money by Average True Range x 2.

Massmart (MSM)

Pennant price pattern with early signs of a bullish momentum shift. Should the ZAR keep strengthening, local retailers should benefit in general. The trend on MSM is rather strong too, so this could make for an opportune time to get long of the stock. Stop loss below the pennant support.

Nedbank Group (NED)

Patience is key. We waited a long time for this range break on NED and now finally all the boxes are ticked. Our first target is R167, with a three-day-low stop loss.

Prosus (PRX)

PRX has been rather respectful of this support level around R1600. We like the high risk-reward on offer for a long trade from here, potentially back to the highs of R1900.

Remgro (REM)

Once again patience is key. Finally REM broke resistance and it looks like the trend change is on. We like REM for an addition to longer-term trading accounts and portfolios.

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 Patience is key to opportunism appeared first on Herenya Capital Advisors.

Offshore trade ideas

S&P 500 Volatility Index (VIX)

We’ve used a weekly VIX chart here to illustrate the significance in the recent reduction in volatility. For over a year the VIX has not ended a week below the 20 mark. Now for two weeks in a row, not only did we see a close of the VIX below 20, it has closed at the lowest level in over 12 months. This is rather significant as it implies that the fear and uncertainty borne of the Coronavirus Pandemic is starting to abate and investors risk appetite is likely returning.

S&P 500 (SPY)

Up, up and away! The MACD trendline from last week has been broken as well. Given the ‘VIX below 20’ context above, it is probably best not to try and pick tops in this market for the next little while.

Nasdaq (QQQ)

The bearish ABC setup has been invalidated as the market closed above the highs of ‘B’. The more brave can take new long positions from here with a trailing stop loss. Perhaps with the VIX below 20, we might see some new highs on the QQQ’s.

Dow Jones Industrial Average (IYY)

Despite a few instances of pessimism and false signals, the IYY is playing out according to targets set months ago. This is a good example of the value of patience.

U.S. Dollar Index (DXY)

Looking at a weekly chart on the DXY, there are some signs of resistance. The 50 week moving average, coinciding with the upper end of the green channel, could potentially be a turning point for the DXY. For now, we need to wait another while for some clarity, and also to see how much brrrrrr we get in any additional rounds of ‘covid relief’ from the Biden administration. If the printers are turned on again, we could see more USD weakness and likely the VIX staying below 20 (a.k.a. equity markets rally).

Brent Crude Oil

Looking at a weekly chart on Oil, we note a potential bullish setup on the break of a short-term downtrend. Note that this is a weekly chart, and thus any trade here will only be triggered at the end of this coming week. More active traders could probably look to lower time frames to find a long entry here. Just be sure to keep a well defined stop loss as a retest of the primary trend line (black) is still possible.

Gold

A nice double bottom off a key support level, as well as a (somewhat messy) break out of the downward sloping channel. Overall things are looking pretty good for Gold. Let’s see if a stable VIX below 20 and a very large printer can help the Gold price catch a bid.

USDZAR

In our view, the USDZAR is now range bound between R14.50 and R15.55. From what we’ve seen, the current ZAR strength is a little misplaced and we would not expect that the ZAR will strengthen beyond R14.50. That said, we could be wrong and a break below R14.50 would make for a decent trend following trade. At present though, our thinking is that we can take long positions from that R14.50 level, with a target at the top of the range.

Ethereum (ETH)

The weekly candle on ETH is not yet finished (about 12 hours to go from the time of writing), so we very technically don’t actually know if this has triggered or not. The trade here though, is to buy on the weekly close above the previous all time high. It should be safe enough to get involved now, with a ATRx2 (weekly) trailing stop. Destination: moon.

Bitcoin (BTC)

BTC does not have such a clear setup on it as ETH has, but a break higher can likely be bought with the same trailing stop loss methodology as ETH.

South African trade ideas

JSE Top 40 Index (ALSI)

The bullish divergence on the ALSI looks like it will lead to new highs. The ALSI was stuck under the 20 day exponential moving average for three days, but closed above it on Thursday. The ALSI feels constructive here for a move to new highs.

Anglo American PLC (AGL)

AGL triggered a long for us last week, and since then has been consolidating. We still like the long trade and know we must be patient and allow the trade the time to work.

AngloGold Ashanti (ANG)

ANG bounced from support. It is now trying to get above both the 50 and 89 day moving averages. A solid break above R340 could see ANG testing the 200 day moving average around R400.

Aspen Pharmacare (APN)

APN almost stopped us out below R136. WIth furious might though, it ripped higher in a few short days. Our target is still the top of the channel, now around R170.

BHP Billiton (BHP)

The BHP trade has not progressed as well as we had envisioned. We got a solid entry (similar to AGL), although unless BHP catches a bid real soon, we will stop out below R408.

Gold Fields (GFI)

A break above the right shoulder (R159.26) would still be considered the ideal bullish signal, but GFI is looking good for more than just that. GFI has now broken above the 89 and 50 day moving averages, for a third time. Moreover, Gold seems to have made a double bottom and is attempting a trend change. Further, the ZAR (we think) should likely weaken towards R15.50. Thus, we have a decent setup for GFI and most other gold stocks.

Glencore (GLN)

It looks like the bull flag on GLN has broken out. Price also managed to close above the 50 day moving average. GLN looks good for a trend following trade.

Harmony Gold (HAR)

HAR bounced so well off that support level from last week. We can’t add too much more commentary here, other than this is another good looking gold stock for the week ahead. Perhaps R80 is possible?

Nedbank (NED)

The idea of taking a short trade here is a rather uncomfortable one to be honest. That range is well defined though and the risk-reward on offer might make it worth it.

Sasol (SOL)

The trend is your friend! Should Oil prices break higher, and the ZAR weaken, there is not much that is going to stop SOL.

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 VIX below 20 signals risk on appeared first on Herenya Capital Advisors.

Bigger picture

S&P500 (SPY)

The power of the bounce! SPY held the channel line the week before last, and last week it bounced rather well toward the $400 level. I expect that the SPY will test the dashed blue (upper rising wedge) resistance. Given that stimulus cheques are in the mail, perhaps we trade back to the upper end of the rising channel (aka. much higher than $400)?

Russell 2000 (IWM)

Fresh new highs for small caps in the U.S. Overall this index is looking very strong. After we saw hammer city last week, most indices bounced well and are on track to keep trending higher.

Nasdaq (QQQ)

A rising tide lifts all ships, much the same way a stimulus cheque lifts all stocks (and risk assets in general). QQQ though, has broken below its 50 day moving average and there has been some negative news flow around big tech. Some headwinds from the Chinese state on asian tech and some rhetoric around breaking up the bigger tech companies in the U.S. Although markets are likely to come out blocks strong and bullish this week, watch out for surprise negative news around tech stocks. This could be a nice short setup for those able to easily stick to stop losses. Be aware though, the MACD might be setting up for a buy. So if you do trade it on the short side, keep your stop relatively tight.

Dollar Index (DXY)

DXY has formed a short-term uptrend, which could turn out to be a bear flag. Given that stimulus cheques are in the mail, we could see the bottom fall out from under the USD and subsequently this bear flag play out. Initially, following the breakout from the falling wedge, I’d expected a move back to the 200 day moving average. Although the DXY did not make it all the way up to the 200 day moving average, it did get fairly close. From here, my bias is once again towards USD weakness.

Volatility Index (VIX)

Do we finally see the VIX close below 20 this week? A break below 20 would signal good things for equity markets.

Brent Crude Oil

Brent crude oil has had a great run. It could start slowing down around these resistance levels a little, although in the medium-to-longer-term, higher oil (and energy) prices seem very robust. With supply still tight and demand picking up, we’re likely not many months away from reaching pre-pandemic oil prices.

Gold

Gold bounced off a major support level at $1680. Momentum is turning bullish once more and it looks like we could see a bounce to the 50 day moving average. A possible driver behind the bounce here would be that stimulus cheques are in the mail… So in a sense, the same driver would be in charge here as with the DXY. Gold bugs seeking to hedge against inflation caused by money printing are likely going to feel pretty strong when the markets open.

USDZAR

It looks like we had a fake breakout of the downtrend last week. The R14.50 level is going to be key. There could be a great risk-reward long trade off that level, although a break below it (likely driven by a falling DXY), would likely make for an easier trend-following trade.

Offshore trade ideas

VanEck Vectors Gold Miners ETF (GDX)

A decent bounce in the gold price will no doubt be bullish for gold stocks in general. If GDX can clear resistance at $33.25, we could likely see it bounce as high as $35.50 and having another crack at breaking the current downtrend.

VanEck Vectors Junior Gold Miners ETF (GDXJ)

Momentum is turning bullish on GDXJ as well (which is also the case on GDX above). The line in the sand here is $48.57. Above that and we have a strong case to get long.

ETFMG Prime Junior Silver Miners ETF (SILJ)

SILJ is a little in the middle of nowhere, although the bullish candles off the 200 day moving average and a solid bullish engulfing candle on Friday, and rather bullish looking momentum, makes for a strong case to be long SILJ.

Offshore stockbroking rates

South African trade ideas

JSE Top 40 Index (ALSI)

The ALSI has been trading higher in ‘steps’. As long as the blue trendline holds, I’d expect the ALSI to keep stepping higher. After all, for the Americans, stimulus cheques are in the mail. Risk-on is likely going to be bullish for emerging markets.

ABSA Group (ABG)

ABG above R136 could be a good buy. Recent risk-reward if you are patient enough to wait for a confirmed breakout.

African Rainbow Minerals (ARI)

A set of rather bullish candles and a hold above the 50 day moving average on ARI sets the stock up for a decent long trade in the new week.

BHP Billiton (BHP)

BHP is presenting a high risk-reward long trade off the 50 day moving average.

British American Tobacco (BTI)

Stop loss below R540 with a target at R590.

Compagnie Financiere Richemont (CFR)

Very nice flat top triangle on CFR. A stronger ZAR could work against this trade, although global risk on driven by stimulus could overpower the headwinds.

Capitec (CPI)

CPI has been drifting lower for a while now. A solid break above R1400 would open for a R1495 price target.

Nedbank (NED)

Very technically, Friday closed above the resistance level and thus a long is triggered to be entered on Monday. Stop loss below R140 with a price target of R170.

Harmony Gold Mining (HAR)

HAR reclaimed the 50 day moving average. Considering that stimulus cheques are in the mail, as long as HAR can hold above the 50 day moving average, the long trade is looking attractive. Keep a tight stop though, momentum is looking rather bearish. That said, a strong reaction to the stimulus could be the driver here, which would very likely ignore all technicals.

GoldFields (GFI)

There are signs of bearish divergence, which would play into the large Head and Shoulders pattern. That said, we are still to see how the market (and gold) reacts to the weekend stimulus. For now, as long as GFI can hold above the 50 day moving average, I’d rather be long.

DRD Gold (DRD)

The bearish divergence is a bit more pronounced here, and Friday’s candle (doji) was a close below the very short-term trendline. Under normal circumstances this would trigger a short trade, although, once again, it would likely be wise to wait a day or so just to see what the gold price is going to do. We might see an initial bullish reaction in gold based on the ‘inflation’ narrative, although extreme risk-on sentiment could drive equities and cryptocurrencies more than gold. Some patience to wait for a more clear signal here would be wise.

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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 Stimulus cheques are in the mail 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.