JSE:STXRES Resources Index Breaking Upward Stride
The drop in resources has been unexpected to me (See posts below). I would expect gold stocks to improve in a risk-off environment. However, this has not happened. The theory seems to be that due to the selloff in other stocks large interest has also been caught on the wrong side of trades and have had margin calls and needed to raise cash quickly. They have done this in holdings that were profitable and easiest to sell which have been the safe haven areas such as gold and bonds. Further, with the price war in oil that has also affected the resources index. The start of the trading range looked like a reaccumulation range with the volume on the increases and higher highs being made. Price also held above the yearly pivot point as has been the case since 2017. However, the last increase was on very low volume which should have been a pre-warning to what is to come. A high volume attempt to go up on the last green bar had no response and then followed the decline. The upward stride has been broken and resources have turned bearish.
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