Date: 21 September Contents (ctrl+click to follow link): SP 500

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1 Date: 21 September 2015 Contents (ctrl+click to follow link): SP 500 ; Top 40 Chart ; Currency ; Charts of Interest ; Relative Rotation Graph ; Scatter Graph ; Sector Analysis ; Weekly Perfomances SP 500

2 The SP500 broke to the upside of the symmetrical triangle we drew in the last report, but the breakout was short lived. The SP500 has now formed a flat top triangle, with resistance being just shy of the 2000 level. We will have to wait and see for the direction of the breakout. Home TOP 40 CHART

3 The Top40 Index had a strong upside break thanks to SAB. The target of the triangle break was reached. We are now once again at that neckline around the level. We have resistance at and support at the lower side of the triangle at roughly Home CURRENCY The Rand

4 From the last report we mentioned that support could come at the level to the $. Now that we are there, it seems that the Rand has found resistance and wants to weaken again. Home CHARTS OF INTEREST This week we will choose a few stocks from the midcap index that look interesting. These include ILV, SUI, PSG and GND.

5 Illovo seems to have reversed its downward trend with a symmetrical triangle having been broken. The target of the triangle points to its 200 MA which is at R20.

6 From the above 5 year chart we can see that Sun International has been in a quite a sharp downtrend. However, it may be reaching a long term support line at around the R90 level. We need to see if SUI can reverse off this level. PSG is trading at resistance and could potentially move back down into its trading range.

7 Grinrod seems to have reversed its downward trend and is now trading in a new upward trading channel. It is, however, approaching its 200 DMA and can find some resistance here. Home RELATIVE ROTATION GRAPH Below we have a few sectors relative to the Allshare Index. The sectors are based on the Business Day division of sectors.

8 The sectors that are out performing the AllShare with good momentum are property, consumer goods and industrials. See the scatter graphs for the components of these sectors. Explanation on the RRG: Note that each symbol on the chart is plotted as a dot with a tail extending backwards. The tail shows you the history of the symbol's position in the past. Each dot on each symbol's tail represents one period, in this case a week. The large dot at the end of the tail represents the current relative momentum values for that ticker symbol and the colour represents the current quadrant it finds itself in. There are four quadrants on the chart: Leading (Green) - strong relative strength and strong momentum Weakening (Yellow) - strong relative strength but weakening momentum Lagging (Red) - weak relative strength and weak momentum Improving (Blue) - weak relative strength but improving momentum Typically, indices progress through the quadrants in a clockwise manner. Interpretation: The longer the tail, the bigger the move and higher the volatility. The further the index is from the benchmark (the cross hairs) the bigger the move in relative performance (up or down) RS-Ratio (relative strength) is more important than RS-Momentum

9 The rotational patterns are not always perfectly circular and will not always rotate through all four quadrants in a clockwise manner. These are, after all, financial markets driven by fear and greed. In general, a cross from the left half to the right half signals a new uptrend in relative performance. This means RS-Ratio has moved above 200. Conversely, a cross from the right half to the left half signals a new downtrend in relative performance. This means RS-Ratio has moved below 200. The underlying trend-following model that powers RRG includes a lag period, as do all trendfollowing models. This means there will already be upward movement in the price relative before the RRG line actually crosses into the leading quadrant. Similarly, the price relative will peak and move lower before the RRG line actually crosses into the lagging quadrant. Symbols in the leading quadrant should be on your buy list because they show relative strength. Symbols in the weakening quadrant should be on your watch-list for deterioration. Symbols in the lagging quadrant should be on your avoid list because they show relative weakness. Symbols in the improving quadrant should be on your shopping list as potential buys. RRGs separate the market leaders from the market laggards and therefore great for channeling your attention to those areas of the market that deserve it. Keep in mind that these are relative performance indicators, and there is still a risk that the rotation turns back or even reverses. Home SCATTTER GRAPH Our attention is to create a picture of where each stock can be seen technically relative to each other in each of the sectors mentioned in the above Relative Rotation Graph. The technical factors we are using is a 50 day moving average and 14 day RSI. The stock position will highlight their overbought and oversold levels. The colour represents the percentage move over the week. Consumer Goods:

10 Basic Materials:

11 Industrials: Health Care:

12 Consumer Services:

13 Telecoms: Financials:

14 Property: Home SECTOR ANALYSIS Percentage points of various Sectors above or below their various Moving Averages: Previous week: INDEX 200 SMA 100 SMA 50 SMA 20 SMA Banks Gen Retailers Resource Industrial Financial Property % price above moving average % price below moving average

15 This week: INDEX 200 SMA 100 SMA 50 SMA 20 SMA Banks Gen Retailers Resource Industrial Financial Property % price above moving average % price below moving average Home WEEKLY PERFORMANCES The week s best and worst performers: JSE ALLSHARE:

16 MIDCAP:

17 Home Compiled by Kevin Barlow-Jones and Simon Hobday Disclosure This report provides general information only. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments mentioned in this report and should understand that statements regarding future prospects may not be realized. No security, financial instrument or derivative is suitable for all investors. Past performance and technical patterns and analysis is not necessarily a guide to future performance. This report may contain a short-term trading idea or recommendation, which highlights a specific near-term catalyst, pattern or event impacting the company or the market that is anticipated to have a short-term price impact on the equity securities of the company. Shortterm trading ideas and recommendations are different from and may not affect a stock's fundamental equity rating. Facts and views presented in this material have not been reviewed by, and may not reflect information known to, professionals in other business areas of Constant Capital, trading as Sinayo Securities. Neither Constant Capital, trading as Sinayo Securities, nor any officer or employee of Constant Capital, trading as Sinayo Securities, accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.