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

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

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

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

Last week

Macro Catalyst

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

Closed Trades (Take Profit)

Thungela Resources Ltd (JSE: TGA)

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

Active Open Trades

FirstRand Ltd (JSE: FSR)

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

Impala Platinum Holdings Ltd (JSE: IMP)

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

Harmony Gold Mining Co Ltd (JSE: HAR)

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

British American Tobacco PLC (JSE: BTI)

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

Mr Price Group Ltd (JSE: MRP)

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

Standard Bank Group Ltd (JSE: SBK)

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

Sasol Ltd (JSE: SOL)

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

MTN Group Ltd (JSE: MTN)

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

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

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

Closed Trades (Stop-loss)

Sibanye-Stillwater Ltd (JSE: SSW)

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

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

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

Naspers Ltd (JSE: NPN)

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

Absa Group Ltd (JSE: ABG)

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

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

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

Conditional / Setup Watchlist

Northam Platinum Holdings (JSE: NPH)

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

Pepkor Holdings Ltd (JSE: PPH)

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

Exxaro Resources  (JSE: EXX)

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

Discovery Ltd (JSE: DSY)

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

Thoughts on the week ahead

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

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

Economic Data

Start your trading journey with us today!

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

The weekly game plan is back

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

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

The post The Whipsaw rodeo appeared first on Herenya Capital Advisors.

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

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

Last week

Macro Catalyst

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

Closed Trades (Take Profit)

Aspen Pharmacare Holdings Ltd (JSE: APN)

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

Truworths International Ltd (JSE: TRU)

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

Harmony Gold Mining Co Ltd (JSE: HAR)

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

Active Open Trades

Thungela Resources (JSE: TGA)

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

Sibanye-Stillwater Ltd (JSE: SSW)

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

Harmony Gold Mining Co Ltd (JSE: HAR)

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

British American Tobacco PLC (JSE: BTI)

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

Absa Group Ltd (JSE: ABG)

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

Standard Bank Group Ltd (JSE: SBK)

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

Sasol Ltd (JSE: SOL)

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

Naspers Ltd (JSE: NPN)

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

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

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

Closed Trades (Stop-loss)

Valterra Platinum Ltd (JSE: VAL)

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

Vodacom Group Ltd (JSE: VOD)

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

Conditional / Setup Watchlist

Northam Platinum Holdings (JSE: NPH)

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

Thoughts on the week ahead

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

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

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

Economic Data

Start your trading journey with us today!

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

The weekly game plan is back

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

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

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

Sasol (SOL)

We here at Herenya have looked at Sasol extensively and have held positions on the stock for some time, but we think the time has come to sell. Sasol has seen phenomenal gains since the start of the unfortunate conflict in the Middle East, and those gains are simply due to the supply and demand of oil, which has seen global disruptions. With talks of a potential ceasefire looming, which will drive the oil price down, we believe it is time for us to take profit. Currently, we still think Sasol will trend higher, and are looking for a goal price of R225, but are comfortable with the profit we are seeing.

Rotating Into Precious Metals

During the course of this war, we shifted our positions to try to stay safe by looking at offshore energy markets like gas and coal. Now, with talks of negotiations and a potential ceasefire, we are looking to rotate back into resources like platinum and gold, which were doing well before the war, but have since fallen quite a bit. We are looking forward to a time when the markets bounce and rally once things start cooling off. Some might call this brave; this is, in reality, a tactical trade, since we are seeing some reports of US troop movements and deployments to the surrounding Gulf as “strategically placed forces”, but we find the fact that there are even talks supposedly happening reassuring. We know President Donald Trump wants to find a quick resolution to this war to protect his approval rating, which is declining rapidly as this war goes on. We will be looking at Valterra Platinum, AngloGold Ashanti, Harmony Gold Mining Company, Impala Platinum Holdings, and Sibanye Stillwater.

The magic happens in our community!

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

*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 Selling Sasol, buying gold and PGM miners appeared first on Herenya Capital Advisors.

The post Technical analysis on Naspers, British American Tobacco and more appeared first on Herenya Capital Advisors.

Recent Trades

Buy DRD Gold

It’s no secret that we are bullish Gold and we think that DRD is offering a decent risk-reward. Should the wheels fall off the U.S. economy later this week after they report some economic data on Thursday, we believe that Gold should catch a bit and DRD is well positioned to shine in that scenario.

Buy and Sell GFI

We caught the bounce on GFI. After it bottomed on the 22nd of Feb, we managed to get some stock at R229.80, which we sold the very next day (23rd of Feb) at R241.11. If you get a good chance to make a quick buck in uncertain times, take it with both hands.

Buy and Sell SSW

Well, not every trade is a winner. We bought and stopped out of SSW. Entry was R20.82 and we stopped out at R20.18 two days later. Uncertain times indeed.

Buy MCG

So MCG turned down Canal +, only to announce a content deal with Paramount Plus. This is certainly good news for MCG streaming subscribers. Here’s looking good for new highs once this level is broken. We bought the break at R107, which may have been a bit early, but we think it should be ok in the end. Target is R123 with a stop at R100.

Herenya on TradingView.com

Exciting news! Herenya now integrates with TradingView.com! Our clients can trade directly from TradingView, enhancing convenience and efficiency. TradingView offers top-tier market tracking, financial news, and quotes, aligning with Herenya’s commitment to innovation. This integration simplifies investment management for all, whether seasoned investors or newcomers. Log in to TradingView with your Herenya account to access seamless trading and real-time data. Join us now for expert guidance and enhanced trading capabilities.

If you are not trading with us yet, what is stopping you?

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

The post Uncertain times appeared first on Herenya Capital Advisors.

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.

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

Bigger picture (offshore trade ideas)

S&P 500 (SPY)

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

Nasdaq (QQQ)

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

Gold

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

U.S. Dollar Index (DXY)

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

Brent Crude Oil

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

USDZAR

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

S&P 500 Volatility Index (VIX)

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

South African trade ideas

JSE Top 40 Index (ALSI)

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

AngloGold Ashanti (ANG)

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

British American Tobacco (BTI)

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

Aspen Pharmacare (APN)

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

Bidvest (BVT)

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

Compagnie Financiere Richemont (CFR)

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

FirstRand (FSR)

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

Gold Fields (GFI)

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

Naspers (NPN)

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

Sanlam (SLM)

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

Sasol (SOL)

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

Sibanye-Stillwater (SSW)

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

Telkom (TKG)

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

Subscribe for post updates

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

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

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

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.

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 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.

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 American Bull appeared first on Herenya Capital Advisors.

Bigger Picture (offshore trade ideas)

S&P 500 (SPY)

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

Nasdaq (QQQ)

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

S&P 500 Volatility Index (VIX)

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

Gold

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

Brent Crude Oil

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

U.S. Dollar Index (DXY)

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

USDZAR

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

South African trade ideas

JSE Top 40 Index (ALSI)

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

City Lodge Hotels (CLH)

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

Sibanye-Stillwater (SSW)

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

Anglo American Platrinum (AMS)

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

Bidvest (BVT)

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

Subscribe for post updates

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

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

The post Tug of war appeared first on Herenya Capital Advisors.