The JSE Top 40 Index Futures (JSE: J200) grapple with volatility, recording a daily gain of 0.26%, mirroring the global unease ahead of the crucial US Federal Reserve meeting. However, week-to-date performance shows a 0.77% decline, contrasting with the previous week’s impressive 3.43% surge.
On one hand, the index has found support, fuelled by the shimmering strength of gold prices and investor hope. Gold miners like Gold Fields and AngloGold Ashanti bask in the precious metal’s glow, their share price’s appreciation aiding the index’s recovery.
However, the looming shadow of the Federal Reserve meeting casts a cautious counterpoint. The potential for higher-for-longer interest rates in the US has dampened investor sentiment, potentially prompting them to seek safer havens away from the J200’s sparkle.
Technical
On the 4-hour chart, the index futures sit at R68,097.30, trading slightly flat as the index continues to seek direction in the short term ahead of the crucial trading sessions. The price action recently broke above the 20-SMA (green line), 50-SMA (blue line) and 100-SMA (orange line), hinting at a potential shift towards higher ground.
The upward-sloping RSI currently hovers at 57.90, suggesting positive momentum. Therefore, short-term trading opportunities could exist towards the resistance level at the R69,222.89 price level should the bulls sustain a push above the 61.80% Fibonacci retracement level. A break above the initial resistance could confirm the bullish momentum, likely bringing the R70,083.03 and R70,720.91 resistance levels into play.
However, short-term trading opportunities could arise towards the initial support at the 38.20% Fibonacci retracement level (R67,350.75) should the bears sustain a push below the 50.00% Fibonacci retracement level. A break below the R67,350.75 level would bring the 23.60% Fibonacci retracement level (R66,554.57) and R65,267.58 support levels into play in the short term.
Summary
The JSE Top 40 stands at a critical juncture, its immediate trajectory poised on a confluence of technical indicators and fundamental catalysts. A sustained push above R69,222.89 could pave the way for a bullish surge, potentially reaching R70,083.03 and beyond. Conversely, a dip below R67,350.75 might open the door for bearish correction, potentially dragging the index down to R65,267.58.
Sources: TradingView, Moneyweb, Business Day, Dow Jones Newswire.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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