Quick overview
- The JSE FTSE Top 40 Index is currently at 82,461.70 ZAR, having bounced back from an early April low of 74,493 ZAR.
- Despite a slight daily decline, the index has risen over 10% and surpassed key technical levels, indicating a bullish trend.
- The next major resistance is at 83,410 ZAR, with a potential buy setup if the index closes above 83,150 ZAR.
- Market sentiment is pressured by global factors and local issues, while gold prices continue to support mining stocks on the JSE.
JSE FTSE Top 40 Index is at 82,461.70 ZAR after a decent bounce from the early April low of 74,493 ZAR.
Despite a small daily decline of 0.09% (-57 ZAR), the index is up over 10% and has reclaimed the 50-period EMA at 80,541 and gone above the 23.6% Fibonacci level at 81,306.
This structure has the next major resistance at 83,410 ZAR, a level that capped the upside previously. RSI at 63.53 is mildly overbought but the bigger picture is bullish.
Technical Trade Setup:
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Entry: Buy on close above 83,150
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Target: 84,250, then 85,390
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Stop Loss: Below 81,280 (EMA and Fib confluence)
This setup relies on holding the 81,300-80,500 support zone. A close above 83,150 with volume confirmation may attract more buying into mid-April.
Rand and Trade Policies Weigh on Market Sentiment
The rand is at 18.8550 against the dollar, under pressure from global macro and a stronger greenback. Investor caution is rising with U.S.-China tariff uncertainty and South Africa is part of the global supply chain.
Local issues are also adding to the pressure. A proposed VAT hike is at the center of the budget debate and investors are waiting for clarity before committing capital and the rand is softening as a result.
Together these global and local headwinds make for a tricky environment for South African equities.
Gold’s Price Action Supports Mining Stocks
Gold is still key to JSE dynamics. After peaking earlier this week gold has pulled back slightly but is still elevated with U.S.-China trade and more dovish Fed expectations.
South African mining stocks, heavily represented on the JSE, are benefiting from gold’s safe-haven appeal. But any sharp correction in gold could trigger volatility in the index.
Conclusion: Optimistic but Cautious
Short term uncertainty but the JSE FTSE Top 40 has technicals and commodities to work with. Above 83,410 ZAR and we could see new multi-week highs if the macro doesn’t change.
Watch gold, political stability and external trade shocks – these will be the drivers of the JSE.
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
