South African Shares March On

The JSE Top 40 Index (JSE: J200) is on a roll, marking its third consecutive week of growth, now up by 0.59%. It’s been a steady climb, with gains of 2.56% and 3.81% in the preceding weeks. Riding the wave of a weakened South African Rand following recent economic data releases, the index is swiftly approaching a crucial psychological threshold that could dictate its future direction.  

Economic indicators, like South Africa’s PPI, showed an expected increase from 5.1% to 5.8% this week, while the budget deficit expanded marginally from R40.57Bn to R41.23Bn. Looking ahead, all eyes are on the upcoming release of South Africa’s GDP growth figures next week, which are anticipated to influence the market direction for the JSE Top 40 Index. 


On the 1D chart, a rising wedge pattern has emerged, with the dynamic resistance of the wedge aligning with the 61.8% Fibonacci retracement golden ratio at 69.851.95. The index is showing signs of persistence, pushing through this pivotal resistance, but with Jerome Powell’s speech looming, there could be some volatility to end off the week.  

If the price remains above this resistance sustainably, the uptrend could continue. Resistance at 71,069.57 could be the first hurdle to the upside, potentially triggering a temporary retracement if the breakout occurs. However, if the momentum is sustained above this resistance, then higher resistance at 72,002.99 and 72,700.12 could halt the momentum.  

Alternatively, if the price fails to stay above 69,851.95 sustainably, a wedge breakdown remains in play. The Fibonacci midpoint at 68,607.34 could then be the key level to watch out for, backed by the 100-SMA (orange line), which could require a large volume selloff to drive the price lower toward the demand zone at the 25-SMA (green line) of 67,408.45.  


On track for its third consecutive week in the green, the JSE Top 40 Index awaits comments from Jerome Powell later on Friday, which could trickle through to the equity market. Resistance at 69,851.95 is the critical level to watch in the upcoming session, as a sustainable breakthrough could prevent the possibility of a breakdown at the rising wedge as we advance.  

Sources: Koyfin, Tradingview, Reuters 

Piece written by Tiaan van Aswegen, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.