Bigger picture (offshore trade ideas)

S&P 500 (SPY)

Not only has SPY broken the uptrend line that has been in place since the beginning of the year, you might also see a head and shoulders pattern that has been forming since June. Should the neckline of that pattern break, we might see SPY trading all the way down to $418. For now, our bias here remains bearish.

Nasdaq (QQQ)

QQQ has a very similar setup when compared to SPY. Again, our bias is towards the short side. As a side note, we noted that even after an incredible earnings beat by NVDA, it didn’t manage to hold onto the highs it printed during the after-hours session when results were released. This confirms our bearish bias and make us think that being long U.S. tech stocks is risky business and we have to be dancing close to the door (aka. be ready to bolt out ball when the pawpaw’s start flying towards the fan).

MSCI All Country World Index (ACWI)

Here is where we get into mixed signal territory. While you could argue that the setup looks somewhat similar to those on SPY and QQQ, we want to point out the reverse bullish divergence on this chart. You will notice that the very same divergence is present on both the SPY and QQQ charts. This serves as a good reminder that even strong opinions must be loosely held. We think that the market should come down and are positioned accordingly, but we could be wrong in our view and might have to react rather quickly should the market not do what we expect.

Platinum

Right then, let’s talk about buying opportunities. We had this little bounce pinned on Platinum a few months back, then we saw the reversal and a retest of the lows followed by another bounce. We like Platinum here, in particular a platinum stock which we will get into in the local trade ideas section a little further down. Once Platinum can close and hold above $990, it’s only up from there we think.

Brent Crude Oil

Brent is still dancing close to the door… uhm, close to the upper resistance level. We’d like to see it break higher, but for now we have to be patient for a clear signal. We still like Sasol for a long trade from support (we’ll show the trade a bit further down), but it very much depends on whether or no Oil makes a move to retest the lower end of the range it’s been stuck in since the beginning of the year.

USDZAR

While we don’t really have a very clear view of the ZAR right now, we do think that should BRICS nations start to settle trade in local currencies, it will be very good for the ZAR. We’ve hear that the BRICS have agreed to go ahead with local currency settlements for trade between BRICS nations, now it’s just a matter of implication. Overall, and this might not be the popular opinion but, we think that is a strong positive for our economy.

South African trade ideas

JSE Top 40 Index (ALSI)

About as clear as mud… All we can comfortably say here is that the 66955 level is big. You could trade for the bounce (using a tight stop), or wait for the break and sell into a potential move to 64000. Right now, for us, there is no setup. It does look like the last week has made a bit of a bear flag, but there is also some reverse bullish divergence. So, flip a coin? Either way, watch that 66955 level. There will be a good risk-reward trade to be had in either direction there. Just remember, dancing close to the door is a very good idea.

Aspen Pharmacare (APN)

APN is sitting right on the previous resistance level at R186-ish. There is a good risk-reward long trade from this level, but again, dancing close to the door means tight stops.

Naspers (NPN)

Well, NPN neve broke out the top of the range and is now making its move down to the bottom of the range. Maybe a sneaky long trade from sub-R3000 is the best way to play it now?

Remgro (REM)

Is that a bull flag on REM? It might just be. We like the long trade here.

Sasol (SOL)

SOL is once again testing the support level around R230. If we see Oil give back some gains and head to the bottom or its range, we might see SOL break down below that R230 level. Until then, we stay bullish. Keep disciplined though, because below such a long-term and significant support level the move could be big and fast. Keep dancing close to the door.

Compagnie Financiere Richemont (CFR)

When the trend line broke, it was game over. Friday’s close was on the lows as well, so while we cannot tell how much further this move goes down, we imagine that there is still some meat left in it. If you are short here, you could probably add a little and move your stop loss lower down (to around R268-ish).

Capitec (CPI)

It’s not looking good for CPI. It’s hanging onto the downtrend line for dear life. Maybe this is just a thorough retest… but maybe it’s a complete failure to break out. We can also see a small head and shoulders pattern. We think it’s probably best to abandon longs here for now.

Impala Platinum (IMP)

IMP is looking like a gem to us. Well, let’s see how results go (due out on Thursday next week). The market seemed a little disappointed when guidance came out indicating the dividend will not be as big as what most had hoped for. That said, results are due soon and there might be some upside surprise nonetheless. Lots of upside to be had here if earnings and dividends are beyond expectations.

Sibanye-Stillwater (SSW)

It’s also almost earnings time for SSW. Like with IMP above, we think the worst might be over here and that the time to buy is upon us. Earnings next week will be our guide.

Join a winning team

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

Local stockbroking rates

Offshore stockbroking rates

Subscribe for post updates

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

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

The post Dancing close to the door appeared first on Herenya Capital Advisors.

Bigger picture (offshore trade ideas)

S&P 500 (SPY)

As usual, we start with the SPY. We’ve been a little prematurely bearish here while the market kept climbing higher and higher. It seems now though it has finally made a downturn after hitting the $461 level we focused on some months ago. From here, we’d expect to see the market test support at $430.

Nasdaq (QQQ)

Next up is the Q’s. Nasdaq ran a little harder than the upside target we had for it, which was the source of much of our premature bearishness. It has since turned and is about to test the very steep uptrend line. Our thinking here is that the trendline breaks and we finally see a decent correction after around four months of straight up.

ProShares UltraPro Short QQQ (SQQQ)

If the QQQ does in fact break that trendline and has a bit of a wobble/correction, we really like SQQQ for a strategic hedge or a speculative long. Keep in mind, this is an inverse ETF with 3x gearing. In other words, if QQQ falls 1%, SQQQ should rally 3%. In other words, keep a tight stop on this.

Brent Crude Oil

Alright, so Oil has reached the top of the channel. Where too from here, we will have to wait and see. It’s looking a little overbought at the moment, but we’re not brave enough to bet against it just yet.

USDZAR

R18.60 held… for now at least. Do we move down to R17.60 again, or do we break above resistance and head for R19.50 again? Let’s see. Our current view is that we see weakness ahead, so our call is R19.50.

South African trade ideas

JSE Top 40 Index (ALSI)

We called a bullish break of this resistance level on Trade of the Week (BDTV show on Monday’s), although it seems that we got it spectacularly wrong. Let’s see how the week ahead unfolds. We’d love to be bullish here, but if the U.S. markets come off a bit, we don’t see how the ALSI will be saved from the downward pressure. That said… Rand hedges and locals could rally. Banks have been really strong lately and EM is generally undervalued in our view. Hard to call to be honest.

Capitec (CPI)

Talking of strong banks, CPI seem to have broken the downtrend. Well, almost. It needs to clear R1800 (which very technically, it did on Friday) in order to print a higher-high. R1900 next stop?

AngloGold Ashanti (ANG)

We were looking for the bounce from the trendline. It tried, it back-tested, we thought that it might be giving another chance to get long… we thought wrong. The trendline broke (on some negative news) and we’ve stopped out.

Aspen Pharmacare (APN)

APN is looking good. Broke above the resistance level, held it on the back-test and closed at the highs on Friday. We like the long here.

Netcare (NTC)

For the brave and the bottom pickers. NTC is once again on the R13.55 level, which it has held and bounced from a few times over the last year or so.

Tiger Brands (TBS)

TBS short is playing out well so far.

Join a winning team

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

Local stockbroking rates

Offshore stockbroking rates

Subscribe for post updates

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

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

The post Short and sweet appeared first on Herenya Capital Advisors.

Bigger picture (offshore trade ideas)

S&P 500 (SPY)

This rally feels a little long in the tooth, but it’s not for us to decide when it ends. A trailing stop loss is advised for those with long positions. For those looking to short, perhaps around $461 could offer a decent risk-reward, although for now we don’t think standing in front of the bus is a good idea. You could put up a tertiary trendline on the move from around June and use that as a potential short entry (or stop loss if you are long). Either way, dance close to the door.

Philidelphia Semiconductor Index (SOX)

SOX is still spending time hugging the upper end of the channel. We’d like to see it test the lower band, but it seems that we will need to be patient. You could probably put a mid-channel line in and use that as a trigger for any new trades here (aka. the short trade to the lower end of the channel). Just note that trading against the trend could be bad for your health.

Nasdaq (QQQ)

See our comments on SPY. ‘Don’t fight the trend’ is probably the only thing we can say here. Well, we will say that we think this has gone too far, but we’ve tried that a few times and have not been right yet (at least not recently). So, we will be patient and wait for the market to lead the way.

Brent Crude Oil

Oil is looking good to hold the $78.85 level and make a push for $87.35.

Gold

Gold pulled back a little in the second half of the week, but overall the move toward the recent highs still seems to be in play. We would be buyers on weakness here, at least for the next few weeks.

U.S. Dollar Index (DXY)

DXY bounced off $99.50 and smacked right into $101. It’s too early to really be able to tell, but we think that we might see the Dollar get really strong again in the near future (aka. get and hold above $101 and head for $103). Will it test the highs around $114 again..? Maybe. It won’t happen fast if it does, but it is possible in a scenario where global economic conditions continue to deteriorate and investors are looking for safety. We also have to be mindful that we could see the U.S. stop with the hikes, which will attract capital into longer-term U.S. Government Bonds, which not only could be a good trade in itself, but also drive much strength for the Dollar.

EURUSD

Forex traders… are we seeing a good short here? Let us know what you think by tweeting us.

USDZAR

The USDZAR is forming a bit of a base here by the looks of it. We think we see some Rand weakness in the week to come.

Top Securities Broker Awards

Once again Herenya Capital Advisors is competing in the Intellidex Top Securities Brokers Awards. 

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

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

The online survey to find the top securities brokers in SA is now open, and we would greatly appreciate you taking the time to complete the 2023 online client survey and share your experiences. 

To rank Herenya Capital Advisors click here. 

The survey will take approximately 20 minutes to complete.

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

In the past year Herenya Capital has grown from strength to strength, not only have we been featured on some of the most revered platforms, but we have also been commended by our peers and our clients for our excellent service and tenacity to stay at the forefront of the finance industry. We also won the title of Best Stockbroker for Traditional Investors in South Africa. We would greatly your appreciate your support to help us take another title of two this year.

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

South African trade ideas

JSE Top 40 Index (ALSI)

You can see what our thinking is by looking at the chart. The last two weeks have been, well, not in line with our thinking. So, we stay open to the idea that is might just keep pushing higher, but we really still don’t have any reason to believe that the market is bound to go higher. In other words, we remain bearish.

Sasol (SOL)

Oil price looking bullish, Rand looking weaker… spells good times for SOL if you ask us. As long as this base holds (green line), then we should be good to stay long.

Tiger Brands (TBS)

This little bear flag setup on TBS looking like it is starting to get going now. R135 calling?

Anglo American (AGL)

It’s beginning to work! There is a lot of upside in this trade in our view, so be patient and give it the space and time it needs.

Aspen Pharmacare (APN)

APN closed at the highs on Friday, breaking the overhead resistance (not drawn, but visible in the form of that thin dotted blue line) and opening for the next leg higher. R200 then R210 as short-term upside targets. R230 and R240 as medium-term upside targets.

City Lodge Hotels (CLH)

The CLH trade is working very well. We do think that there is more upside to be had here over the coming months, but perhaps taking some (a third, or even half) of the money off the table is not entirely a bad idea.

Join a winning team

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

Local stockbroking rates

Offshore stockbroking rates

Subscribe for post updates

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

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

The post Staying flexible appeared first on Herenya Capital Advisors.

Bigger picture (offshore trade ideas)

S&P 500 (SPY)

The double top we looked at last week has failed and the market went on to push higher. It seems now that SPY wants to trade to that $461 level. We are going to be patient in the sense that we are not going to chace the long trades here, nor are we going to continuously attempt to short. We will wait for another clear setup before we trade again.

Nasdaq (QQQ)

The QQQ chart looked a little better to us last week than the SPY chart did. As mentioned last week, it made a double top right on the resistance level. Well, thank goodness for stop losses because on Wednesday the resistance was blasted through and QQQ kept printing highs. We can debate the candle that formed on Friday (shooting star?), but as is the case above, we’re going to sit back and wait for a new setup before making any moves.

Philadelphia Semiconductor Index (SOX)

SOX still bumbling along the top end of the channel. We’re still of the view that we will see SOX test the lower end of the range, and with bearish engulfing candle printing on Friday, the short trade is looking mighty tempting here. This might be one that we actually take the short on when U.S. markets open on Monday.

U.S. Dollar Index (DXY)

DXY tagged the $99.50 level. Where to from here? We think we see the bounce to $101.30 before eventually breaking below $99.50 (and trending lower).

Brent Crude Oil

Oil finally made it above the midpoint of the range it has been trading in for some time. Let’s see what it does from here. We would like to see it trade all the way to $87.35, but we’re not sure that it will be able to do that immediately. It does look a little overbought here. Patience is needed here. Technically this is now in the middle of the range, so there is really no setup to be traded here.

Gold

Alrighty, gold broke the short-term downtrend and so far seems to be going for a move back to the highs. On the back of this chart (and move in gold price), we like gold stocks for longs in general here.

Platinum

Platinum has also put in the bounce we were looking for. Let’s see if it has enough legs to get back to the highs.

USDZAR

Ok, so maybe some bears get honey. The bear flag on the USDZAR has worked beautifully. We looked at this chart two weeks ago, then thought we were wrong and last week expressed our confusion. Seems all we needed was some patience as the ZAR went on a rampage last week. From here…? We wait for a new setup. We’ll likely see R17.60 soon, but let’s wait for it to consolidate there and give us some idea of what it wants to do next before we take any new trades.

Top Securities Broker Awards

Once again Herenya Capital Advisors is competing in the Intellidex Top Securities Brokers Awards. 

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

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

The online survey to find the top securities brokers in SA is now open, and we would greatly appreciate you taking the time to complete the 2023 online client survey and share your experiences. 

To rank Herenya Capital Advisors click here. 

The survey will take approximately 20 minutes to complete.

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

In the past year Herenya Capital has grown from strength to strength, not only have we been featured on some of the most revered platforms, but we have also been commended by our peers and our clients for our excellent service and tenacity to stay at the forefront of the finance industry. We also won the title of Best Stockbroker for Traditional Investors in South Africa. We would greatly your appreciate your support to help us take another title of two this year.

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

South African trade ideas

JSE Top 40 index (ALSI)

Oh how wrong we were last week on the ALSI. The super strong Rand lifted most of the market (although in very thin volume), while the pumping gold price pushed the gold stocks. This was the perfect storm for the ALSI longs. Well done to the bulls. We concede and we wait for another setup.

AngloGold Ashanti (ANG)

ANG bouncing off the trendline like a champion! We hope you got a decent long entry here. Keep a trailing stop loss and have some patience. We think we might have a proper winner here.

Capitec (CPI)

Banks have been strong and if the Rand keeps it up, banks will likely stay strong. CPI is headed for some resistance though in the form of a medium-term downtrend line. This makes us go “mmmmmm”…. Let’s see though, if it can break that downtrend it might put in a strong move higher.

FirstRand (FSR)

Sticking to the theme of strong banks for a little bit, we see a bull flag (flat) that has broken on FSR. This triggers a long trade with a good risk-reward.

Naspers (NPN)

Again we’re adding NPN because we think it is an important chart to keep aware of. We’ve spoken about the range for many weeks now. When this eventually breaks, there will be fireworks. Keep watching it and stay patient.

Netcare (NTC)

Maybe a cheeky little long here from the bottom of the range on NTC?

Reinet Investments (RNI)

RNI once again breaking a consolidation to the upside. Decent trend following long trade here we think.

Join a winning team

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

Local stockbroking rates

Offshore stockbroking rates

Subscribe for post updates

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

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

The post Up she goes! appeared first on Herenya Capital Advisors.

Now, yes, we did say this a few weeks ago and the market has remained persistently strong. Relatively at least… U.S. markets are slightly higher, but locally markets are slightly lower. So, no real fireworks just yet. Perhaps the momentum finally shifts down, and we see the market come off a little? Particularly in the over-hyped tech sector. Let’s look at some charts and get a better idea of why we’re thinking what we’re thinking.

*Also, please just note that as usual, the offshore indices we chart are in fact ETFs of those indices as those are tradeable. If you are not trading offshore for only $2 a trade, click on that open account button. Top right. You got it. Ok, time for charts.

Bigger picture (Offshore trade ideas)

S&P 500 (SPY)

This is ironically one of the charts that is not so clear to us right now. The levels marked in yellow are our up and downside targets. We think down before up and it should be noted that if $418.31 doesn’t hold, we could see this push to $400. Also, that does look like a double top, does it not?

Nasdaq (QQQ)

QQQ is a lot more clear to us than SPY. Once again we see the double top, but this time it is in fact directly below the resistance level we pointed out a few months ago. It feels like this bullish move has now run its course and it’s time to wobble a little. Our thinking is that we will likely see QQQ come off to test the previous significant horizontal level (also marked in yellow) at $333.57.

Philadelphia Semiconductor Index (SOX)

SOX found some resistance at the top of the channel. Momentum is shifting toward the downside, and if you squint just right you might see a little head and shoulders pattern. Look out below! Time to wobble.

U.S. Dollar Index (DXY)

Friday came along and said woah! It looks like that support at $101.30 is going to be tested once more. The question we are asking ourselves is ‘are we forming a base here or are we forming a flat?’. In other words, does $101.30 hold and this is the long-drawn-out starting phase of another bullish move over the next few months/years? Or, does the support break on the third attempt and we see the Dollar weaken substantially going forward? Time will tell. Time to wobble.

Brent Crude Oil

We could probably pose the question as above (with DXY) here on Brent. The way we see it is that Brent has been bouncing between the bottom and the mid-point of the range for a few months now. We’d like to see it break above $79 and head for $87. The start look aligned here. We’ll look at a Sasol long as well.

USDZAR

Time to wobble? But its so wobbly already! That’s a volatility joke by the way. This chart is, well, maybe we need new ideas and perspectives here. To us, this looks like a monster bear flag… but it could also go to R19.50. Let us know what you think on Twitter.

Platinum

Platinum might have gone a little far on the downside here and from our perspective it looks like it is going to try put in a little bounce here.

Gold

Gold is looking fairly bullish right now as well. At least, it looks like a decent bullish setup complete with a bearish equity market view to back the risk-off idea. Let’s see if it can get going.

Apple (AAPL)

This trend looks a little long in the tooth. We’ve marked out our trailing stop for AAPL longs. A daily close below $188.92 will stop us out of a position that has done really well. It is worth noting that when it is time to wobble for these giant tech stocks, the rest of the market will surely follow. The majority of the Nasdaq Index and a big chunk of the S&P 500 Index are in just a handful of stocks that are all highly correlated. Once the tech giants begin to wobble a little, the straw house that is the U.S. stock market at the moment is likely to be blow over.

Applied Materials (AMAT)

As a way of example, looking at AMAT, we see that our trailing stop has already been triggered. Now, AMAT is not as exciting as AAPL or TSLA or NVDIA or (insert any A.I. stock in here), but AMAT is a large supplier to many of these companies. Semiconductors have to be made somehow, right? AMAT might be the canary in the coal mine here.

Microsoft (MSFT)

MSFT is also teetering on the edge here. A daily close below $332.81 will trigger the trailing stop loss. As is the case with the illustrated trailing stop losses above, these could act as short entries for the more active traders. Just be warned, you’re betting against the trend, so keep tight stops.

South African trade ideas

JSE Top 40 Index (ALSI)

Well, well, well, if it isn’t the good old ALSI heading for the longer-term trendline? At least that’s our view. Buckle up, it’s time to wobble.

Compagnie Financiere Richemont (CFR)

It’s not often that you see such a beautiful break and retest of an established trendline. Textbook short setup here.

Naspers (NPN)

Going nowhere slowly… but, keep it on the watchlist as you can trade it between the levels, and when eventually this range breaks, it will do so in glorious fashion!

Shoprite (SHP)

Retailers have done alright recently. SHP underperformed a little over the last few days of last week though. It also looks to us like it wants to go test R192. It’s time to wobble, hold onto your stops!

Sasol (SOL)

SOL has bounced off this level once before… and then came back and slammed right back into it. With the Brent Crude Oil context above, and with this level actually holding fairly resiliently, we think that it makes a great long trade from here. Easy tight stop and a potentially a huge amount of upside.

Thungela Resources (TGA)

If you have been keeping an eye on energy demand forecasts, weather and other going-ns in the energy space in Europe, you will note that there is a slight shortage of the burny black stuff (coal) brewing. This once again plays into TGA hands. Combine that with a falling wedge, very recent higher lows, and you get what looks like a really good long setup for a medium to longer-term trade.

Anglo American (AGL)

Bullish divergence off a significant horizontal support level. Bodes bullish to us.

AngloGold Ashanti (ANG)

So the trendline broke and the head and shoulders worked out perfectly and the trendline is now being tested. Ok then. Given our thoughts on Gold (and Platinum) above, ANG might be presenting a nice long trade opportunity for those who are willing to take a little risk.

Subscribe for post updates

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

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

The post Time to wobble appeared first on Herenya Capital Advisors.

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

Bigger picture (offshore trade ideas)

S&P 500 (SPY)

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

Nasdaq (QQQ)

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

Gold

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

U.S. Dollar Index (DXY)

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

Brent Crude Oil

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

USDZAR

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

S&P 500 Volatility Index (VIX)

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

South African trade ideas

JSE Top 40 Index (ALSI)

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

AngloGold Ashanti (ANG)

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

British American Tobacco (BTI)

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

Aspen Pharmacare (APN)

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

Bidvest (BVT)

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

Compagnie Financiere Richemont (CFR)

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

FirstRand (FSR)

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

Gold Fields (GFI)

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

Naspers (NPN)

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

Sanlam (SLM)

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

Sasol (SOL)

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

Sibanye-Stillwater (SSW)

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

Telkom (TKG)

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

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

The post Kansas City Shuffle appeared first on Herenya Capital Advisors.

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

Bigger picture (offshore markets)

S&P 500 (SPY)

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

Nasdaq (QQQ)

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

All Country World Index (ACWI)

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

Gold

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

S&P 500 Volatility Index (VIX)

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

Brent Crude Oil

Oil remains range bound for now.

USDZAR

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

South African trade ideas

JSE Top 40 Index (ALSI)

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

Bidvest (BVT)

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

ABSA Group (ABG)

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

Anglo American (AGL)

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

Anheuser-Busch Inbev (ANH)

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

Aspen Pharmacare (APN)

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

BHP Group (BHG)

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

British American Tobacco (BTI)

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

Clicks Group (CLS)

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

Sasol (SOL)

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

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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 It’s buy time! appeared first on Herenya Capital Advisors.

Bigger picture (offshore trade ideas)

S&P 500 (SPY)

Good ‘ol SPY had us second guessing ourselves on Tuesday in a big way. Even more so on Wednesday. But the little bull that could did not give up, and it stomped onwards and upwards and closed on a new high on Friday. Plus, there was some positive news around the debt ceiling this past weekend, so we think that we’re in for one glorious squeeze on Monday. SPY needs to clear $430 to confirm a new bullish trend. So far, so good though.

Nasdaq (QQQ)

If there ever was a little bull that could, QQQ is it! Fresh highs on the back of NVDA and the entire A.I. hype train. We know A.I. is a bubble, just like Cannabis, and Work From Home, and GameStop… but hey, while the ducks are quacking, we may as well join the fun. Just be sure to dance close to the door. That said, an A.I. bubble fuelled rally to make some money off, sure, I’ll take two thanks!

All Country World Index (ACWI)

ACWI is next up for a break out. Easy long trade here with a tight stop and a decent amount of upside.

Gold

Gold making its way lower. We think the bottom of the range, but note that we do also think that it will take many months to get there. For now though, it looks like the gold rush is over.

Brent Crude Oil

Oil is still trading in this range. Nothing exciting for now, we’re just putting this here so that you keep an eye on it as not to lose focus on the macro picture.

USDZAR

So we share our weekly chart again. We warned some time ago that the weekly picture is not looking good and that 21-ish is on the cards at some point. We did not see the Russian weapons scandal and an interest rate hike as potential catalysts though. Nobody did. Although, we do find it more than a little ironic that somehow there always seems to be a fundamental ‘reason’ that appears almost exactly when the chart needs it too. Wishy-washy stuff aside, we stick to our view of the large upward sloping channel and the upper channel band being the near-term target. Yes, it’s undervalued. No, the market does not care.

South African trade ideas

JSE Top 40 Index (ALSI)

Are we just allowed to say that we don’t know? Because we don’t. The market will likely start the week strong… CFR is no longer so important. Anything can happen here. Probably higher.

Sibanye-Stillwater (SSW)

SSW is not looking good at all. The support zone has broken and it seems that R31.70 is next up (or, down in this case). We’re letting go of speculative longs (aka. stopping out) and waiting for a new opportunity.

Aspen Pharmacare (APN)

APN is showing some nice bullish divergence and with the weaker ZAR as a tailwind we think it should do well. Speculative long here with a decent risk-reward. Stop below R165, target price of R190. From there set a trailing stop and let it run.

City Lodge Hotels (CLH)

Thanks for the money CLH! And well done to those who took this trade. R5.00 has been reached. It likely has a bit more to go, so a trailing stop might not be the worst idea.

Naspers (NPN)

NPN is range bound for now, so range trading rules apply. Taking a long around here is a high probability trade, so we endorse it.

British American Tobacco (BTI)

BTI is still floating around mid-channel support. Again, range trading rules apply and we’re biased to the long side.

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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 little bull that could appeared first on Herenya Capital Advisors.

Yeah ok, a little dramatic maybe, but that is what it feels like. Here are the charts:

Bigger picture (offshore trade ideas)

S&P 500 (SPY)

Well, well, well, if the SPY didn’t manage to break the resistance level? It’s not exactly at $420 as we have been calling, but the resistance is broken, nonetheless. The American Bull is strong! Perhaps too strong to keep down. And we are sure that there are plenty of shorts out there about to get squeezed till their eyes tear. It might not make sense, but we are here to follow the market – not make sense of it… thus, we go long.

Nasdaq (QQQ)

And here is the source of the power for the foolishly strong American Bull. Tech. It’s been on a tear and has finally now made a new Dow-Theory-High. Uncomfortably, we have to concede here that all indications point to a turning of the trend and the beginning of a few up-phase in markets.

S&P 500 Volatility Index (VIX)

We’d thought we’d see the top of this range before seeing the bottom again, but alas, the American Bull had other plans. Not shown here is the pre-covid lower end of the ‘normal’ VIX range. Perhaps we break this sub-16 low support and the VIX finally returns to its ‘normal’ before the world got duped by covid?

Brent Crude Oil

Nothing really to report here. Oil is still in this range we’ve spoken about for the past few weeks. We’re only interested again once this range is broken.

Gold

The same could be said for Gold really, as our view has not changed since last week. Gold is at the top of the range and is looking rather likely to move toward the bottom end of the range. Since the American Bull over here is trying to break higher (see SPY), risk on sentiment is returning and Gold might get the axe, so to speak. We think the focus shifts away from Gold and onto PGMs and Industrial Metals from here.

U.S. Dollar Index (DXY)

It looks like DXY has formed a decent base at 101.30 and is starting to break higher. It’s found some resistance at 103.70, which is not unexpected. Up through here and 105.30 is the next stop. Fuel to the ZAR fire if you ask us…

USDZAR

The headlines truly have been sensational. There is some expectation that, since the story emerged that it might in fact have been SA buying weapons from the Russians, the ZAR might strengthen tomorrow. Personally, we hope so, but we’re not holding our breath. The channel target is the moon… uhm, sorry, around R22 to the USD. So, let’s hope it never gets there.

All Country World Index (ACWI)

Good ‘ol ACWI seems to be feeling the influence of the American Bull as well. It looks to us like it’s broken our of a key resistance level and is ready to trade higher. Risk on is here.

Before we move onto the local markets, please take some time to vote in our poll. We’d like to get an idea of how much interest there is in offshore markets so that we can decide whether or not we are going to make more content available publicly the offshore traders out there.

South African trade ideas

JSE Top 40 Index (ALSI)

It’s no secret that we’ve been bearish. It’s not been fun. We’re not turning into bulls on SA inc. here either. We just want to remind our readers that the index rebalancing is coming and CFR is not going to be 17% of our index anymore. This may or may not have a big influence on the ALSI as much of the ‘power’ behind it will be gone. SA inc. has not been having a great time and this is not reflected in the headline index. We suspect that once CFR is largely reduced in weighting, the index might surprise to the downside. ALthough, we’ve been saying that for a few weeks now, so take it with a pinch of salt.

Investec (INL)

INL trade seems to be on track. It’s a volatile and less liquid stock in general, so the rather large down day on Friday does not worry us too much as it is not ‘out of the ordinary’ for the stock. Sorry, couldn’t resist. The weaker ZAR surely helps and we’re still looking for above R116 in the short-term.

Textainer (TXT)

No actual trade idea here on TXT. Just a weekly chart trending like a dream. From R150 to R700 in three years. Not many of those around in this market.

Sun International (SUI)

This is a messy chart, but what we are looking at here is two-fold. First, the yellow is a flat-top triangle that has broken higher and has been retested. The white lines shows some bullish divergence (and a bit of a bounce off the R37 level). We like this stock for a long.

Sibanye-Stillwater (SSW)

We had lift-off from this level once before already, and we felt pretty smart at the time. Since then the sad trombone has been getting louder and louder. But, on the bright side, we’re back at the support level and ready for another try at launching this little stock to the moon. Easy long trade here in terms of a clear stop loss and large risk-reward ratio.

City Lodge Hotels (CLH)

Nothing really to report here, other than to reiterate our R5 target price for short-term traders, and the moon for the long-term investors of course.

Anglo American Platinum (AMS)

The AMS idea has been floating around a bit, but it doesn’t seem to be working out so well. We’ll keep the faith for another week, but below R1100 our commitment to this long idea ends.

British American Tobacco (BTI)

Another winner from the ZARs pain here. BTI has been holding the middle here and we think that a long from here to R710 could be a decent play. Stop under R620.

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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 American Bull appeared first on Herenya Capital Advisors.

Bigger picture (offshore trade ideas)

S&P 500 (SPY)

So the SPY still has not taken out the $420 level and thus we still cannot turn bullish on S&P 500 stocks, or the global economy as a whole. There is not really too much to add here that we have not mentioned over the last few weeks. If SPY can take out the overhead resistance, get buying. Until then, either stay short or stay out. We must wait for a confirmed signal before we can make any longer-duration directional calls.

Nasdaq (QQQ)

And in absolute contrast to what we just said above, we think that tech is likely worth buying. QQQ just does not seem to care about the macro picture. We think this could be for a variety of reasons, although one of the most obvious are that big tech were among the first to cut jobs when times started getting tough. Thus, their earnings are likely the most ‘protected’ when compared to other industries. Also, companies like Apple are becoming banks (which, during a banking crisis, seems like a genius move to be honest), and other large cloud computing providers like Microsoft and Amazon, and of course the chip manufacturers that support those industries, are on a path of rapid and accelerating growth. Maybe during these confusing markets it might be time to buy tech again?

USDZAR

Alright, let’s get into it… we look at two charts of the USDZAR. First up is the daily chart. Such a beautiful breakout (which we pointed out on twitter on Thursday), well done to those who caught it. We’ve been whipsawed by the ZAR over the last few weeks, but this sideways pattern it was in had to break at some point and it clearly chose the path of pain over the path we would have preferred, but so be it. The second chart is a rather unpopular chart we have been putting up every now and then for a good while now. It is a weekly chart showing the upper end of the channel at around the R21 to R22 area. Maybe we see the ZAR fight back some on Monday, but honestly, will all that is happening locally with electricity, growing unrest and food security concerns… buckle up buttercup, it’s going to get wild. We hope we are wrong.

U.S. Dollar Index (DXY)

We expected DXY to break support and trade toward 99.50, although it seems that DXY strength won the day. The question we are asking now is, does the DXY range between 101.30 and 103.70, or, 101.30 and 105.30? Also, to be fair, we’re not so sure that DXY strength or weakness will have much of an impact on our local ZAR anymore, given the rather strange and unique circumstances and events surrounding our own currency.

Gold

Well, it seems that gold might actually be holding this upper resistance level. If that is the case, perhaps a short from here back to the bottom of the range? You will have to keep a tight stop though.

Brent Crude Oil

No move to the top of the range then..? if $70.45 breaks to the downside, it’s over for oil and energy stocks.

American Tower Corp. (AMT)

Not a trade idea yet, but watch for a bullish break here.

South African trade ideas

JSE Top 40 Index (ALSI)

Nothing to get the ALSI bid quite like the ZAR blowing out! Despite basically all the locals being under massive pressure, the dual listed stocks have been pumping! Not to mention the great CFR, which my itself at one point added over 1100 points to the ALSI rally on Friday. We’ll look at CFR next for some guidance, but we are cautious of the longs here.

Compagnie Financiere Richemont (CFR)

If CFR gaps down on Monday and puts in a close below R3200, that would make the shooting start to end all shooting stars! So maybe, just maybe we might see that ALSI short working out? That is a pretty big maybe though and we’re not really all that keen to bet against the madness of markets. This candle is not very bullish though and might signal the top of what was one crazy move. A gap lower at the open is worth selling into, just keep a very, very tight stop.

Investec (INL)

INL is still looking pretty good. The weaker ZAR should help a little as well. We’re holding out for between R112 and R116 for now. A close below R100 and we’re out.

City Lodge Hotels (CLH)

CLH long is looking very good. R5 target price should do just fine, thank you very much.

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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 Confusing markets appeared first on Herenya Capital Advisors.