Top 40 J200 *Extract from client research note 01-June-2020
The JSE Top 40 Index has been fairly choppy of late and my sense and analysis suggests that the surge we saw from the mid-March lows is slowly starting to fade with a change of character in the recent weeks. From the low on 19 March to 14 April, the index advanced by 36% – a period where the chart structure reflected a steep trend. Following this period the market made a gradual grind higher by pushing into the breakdown zone i.e. prior support. From the end of the steep rise (14 April) to Friday’s close – a period of just over six weeks – the index is higher by only 861 points, reflecting the range-bound trading action. On Friday we closed lower by 1.91% while the index printed a daily bearish engulfing candle. This morning Asia, trades strongly while US Futures are flat hence we could see the index open in the green however the medium term structure suggests fatigue. Complacency abounds, so take caution.