The JSE Top 40 Index (JSE: J200) has recently experienced a notable surge, with three consecutive weeks in positive territory. This trend is further emphasized by a current week-to-date increase of 85 basis points, reflecting a bullish sentiment among investors.
Among the driving forces behind this upswing are prominent companies like Sibanye Stillwater and Sasol, both witnessing significant gains. Sibanye Stillwater’s ascent is propelled by the record-high price of gold, boosting the shares of precious metal mining firms across the Top 40. Investors perceive the gold mining industry as particularly advantageous amidst the prevailing sky-high gold prices. Concurrently, Sasol’s recent success in securing alternative emission rules at its Secunda Operations has sparked investor optimism, resulting in a substantial 9% surge in its shares during Monday’s trading session.
Looking ahead, market sentiment is poised to be influenced by crucial data points, notably U.S. inflation data and the release of the Federal Open Market Committee (FOMC) Minutes. These insights will guide traders in assessing potential adjustments to monetary policy, shaping the trajectory of the world’s largest economy and global risk sentiment.
Technical
The JSE Top 40 Index has displayed a notable uptrend, currently trading above its 100-day moving average, suggesting a bullish market sentiment.
Initially, the index underwent a consolidation phase, moving sideways within a rectangle pattern, characterized by support at the 65744.40 level and resistance at 68701.49. However, a high volume breakout to the upside has recently occurred, potentially indicating a continuation of the bullish momentum.
If this upward trend persists, the next significant point of interest could be the 61.80% Fibonacci Extension Golden Ratio, aligning with a key resistance level. On the contrary, in the event of bearish pressures, a retest of the 68701.49 level, previously a resistance now turned support, could be likely. Traders will likely closely monitor these developments, with a keen eye on market sentiment and the potential implications for future price action in the JSE Top 40 Index.
Summary
The JSE Top 40 Index exhibits a bullish trajectory, supported by consecutive weeks of gains and key technical indicators such as trading above the 100-day moving average. Recent developments, including significant gains in Sibanye Stillwater and Sasol, signal robust market sentiment. Traders will likely anticipate further upside potential, eyeing the 61.80% Fibonacci Extension Golden Ratio or the 68701.49 support in case of a downturn.
Sources: Daily Maverick, Reuters, Dow Jones Newswires, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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