Just a quick update on the Rand/Dollar and the Top40 and what my program has alerted to.
The Rand has weakened a lot this year, especially after the Moody's downgrade. We have gone up to the R19/Dollar level and did a quick test of the 200day Moving Average on the 10th of June, exactly one month ago. This was done spot on the R16-50 mark and we bounced off this level pretty strongly.
We have now come back to re-test the 200DMA at around R16-78.
The Dollar is currently in a Bull trend vs the Rand (meaning the Rand will continue to weaken). My program has a trading range between R14-80 and R22-03. It is now at the lower portion of its trading range and this could be another testing point. (See the 2 graphs below)
My program also picked up that the JSE Top40 is nearing the top of its trading range at 53 783. We are currently about 4,3% off this level and we have come all this way from 34 000, I can't think that we will not test this level.
Taking both these scenarios into consideration, the chances are reasonably good that we could see a sell-off of shares from the 53 700 level, which will obviously cause the Rand to weaken, as foreign Investor move their money elsewhere.
My program has the JSE Top40 at a target price of 42 930 and a 16,7% decline predicted over the next year. It is in a longer bear trend and still has a negative momentum index.
What are the chances of a break to the Top? Unlikely, but it could happen and it would most likely be a false break and return within its trading range.
Profit-taking on JSE shares would seem to make sense right now and changing that cash into some Dollars wouldn't hurt either, or Investing it on the foreign market or in a Darwin on Darwinex that offers all these. You would be able to buy more Dollars at these levels and get some more Bang for your Buck.