JSE Soars on Easing Inflation

The JSE Top 40 Index (JSE: J200) has closed the past four weeks in positive territory, accumulating roughly 1.43% last week alone. This bullish momentum coincides with a recent slowdown in South Africa’s inflation rate, easing to 5.3% in March 2024 – the lowest level in nearly four years. This positive development comes ahead of the crucial national elections on May 29th, 2024, with the economy being a central concern for voters. 

However, some uncertainties linger. The US Federal Reserve’s stance on interest rates remains unclear, with some officials advocating for extended periods of high rates to combat inflation. Additionally, S&P Global’s upcoming review of South Africa’s sovereign credit rating could introduce market volatility. 

Technical Analysis 

The 4-hour chart shows the index is currently trading at R73,213.75, exhibiting a bullish bias within an ascending channel pattern. The price action sits comfortably above the key moving averages (SMAs) – the 20-SMA (green), 50-SMA (blue), and 100-SMA (orange) – with the 20-SMA recently crossing above the other two, reinforcing the positive trend. 

Bullish momentum could propel the index towards the initial resistance level of R73,899.99. A decisive break above this level on significant volume could confirm a continuation of the uptrend, with the major resistance at R75,305.65 coming into focus. 

However, the RSI (Relative Strength Index) at 66.75 indicates overbought conditions, potentially leading to a retracement. The initial support level of R71,306.49 would then become crucial. A significant volume drop breaching this level could signal a bearish reversal, with R69,849.23 and R68,397.15 becoming potential downside targets. 


The technical analysis leans towards a bullish bias, supported by the ascending channel and the positive moving average crossover. However, the overbought RSI reading suggests a potential pullback before the uptrend resumes. This aligns with the cautious market sentiment surrounding the upcoming elections and the global economic situation.  

Sources: TradingView, Trading Economics, Reuters, Dow Jones Newswire, MT Newswire. 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

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