Weekly Technical Report 18 July 2016

Transcription

1 Weekly Technical Report 18 July 2016 Contents (ctrl+click to follow link): SP 500 ; Top 40 Chart ; Currency ; Charts of Interest ; Relative Rotation Graph ; Sector Analysis ; Weekly Perfomances SP500 above all time highs 1

2 SP 500 The SP500 has not only broken above the much mentioned 2100 level (resistance been in place since Jan 2015) but has now broken above the all-time high of The 2135 level will now be support. 2

3 HOME TOP 40 CHART The Top40 continues to trade in its year-long trading range. The Top40 bounced off the level in June, and then off the level in July, we are now trading at a down sloping resistance trend line. Will the level now be support in August? HOME 3

4 CURRENCY The Rand The Rand broke the 1450 resistance level to the Dollar; the next important level is the 1400 level. The 1450 level now forms Rand support. Home 4

5 CHARTS OF INTEREST The charts we have included are: Gold As we mentioned last week, Gold had reached channel break price target of $1375. Support is $1315, the top of the price channel. Over the last week the platinum and silver price outperformed the gold price. 5

6 Billiton is still trading above is support (upward trending support line) of R180. Resistance is at R Entry points to buy would either be a the support trend line or a break out of the resistance line. 6

7 Richemont has found support at a 3 year support line at R82. There is also a longer upward trend line going back to 2009 that is coming into play. 7

8 MTN has just broken out of a triangle that is trading within a greater sideways channel. Resistance will be at R152. 8

9 Standard Bank seems to be trying to break up through resistance. R130 needs to hold as support. 9

10 Truworths is attempting to break back into its upward price channel. There is small support at R

11 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. 11

12 Health BMat CServ CGoods Tele Indu Fin Prop 12

13 Stocks included in the relative rotation graph indices: Basic Mat Cons Goods Cons Servs Fins Hlthcare Indus Property Telecoms AFE AVI ADH BAT AIP ADR ATT BLU AFX BTI CLH CML APN AFT AWA MTN AGL CFR CLS CPI ASC BAW CCO TKG AMS CLR COH DSY LHC BVT EMI VOD ANG DST COM FSR MEI CGR FFA ASR ILV CSB HCI NTC CIL GRT BIL MTA FBR INL DTC HPA EXX PFG LEW JSE GND HYP GFI SAB MSM LBH GRF ING GLN SNH NPN MMI HDC IPF HAR TBS PIK NED IPL ITU HLM SHP OML IVT NEP IMP SUI PGR MMG OCT KIO SUR PSG MPT RDF LON TRU SBK MUR REB MNK TSH SFN NPK RES MNP WHL SLM PPC ROC S32 SNT RBX RPL SGL All stocks have equal weighting in their relevant REM SAC SOL indices TRE TWR VKE Explanation on the RRG: Both basic materials and healthcare are in the low momentum quadrant, but still outperforming. Telecoms and consumer services are in the outperformance quadrant. Consumer goods is appoaching the outperforming quadrant, while financials are apporoaching the underperformance. Industrials and property have low momentum and are underperforming the Allshare index. Interpretation: 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. 13

14 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 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 SECTOR ANALYSIS Percentage points of the 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

15 This week: INDEX 200 SMA 100 SMA 50 SMA 20 SMA Banks Gen Retailers Resource Industrial Financial Property Percentage shares within the various sectors above or below their various moving averages: Previous Week: Index Ticker Code 20 Day Moving Average Stocks Stocks Above Below Moving Day Averages 50 Day Moving 100 Day Moving Average Average Stocks Stocks Stocks Stocks Above Below Above Below 200 Day Moving Average Stocks Stocks Above Below JALSH 47% -53% 44% -56% 49% -51% 48% -52% TOP40 44% -56% 44% -56% 42% -58% 40% -60% RESI20 64% -36% 55% -45% 73% -27% 64% -36% FINI15 31% -69% 38% -63% 31% -69% 25% -75% JBNKS 71% -29% 86% -14% 43% -57% 29% -71% JGENR 27% -73% 45% -55% 45% -55% 55% -45% JSAPY 57% -43% 38% -62% 38% -62% 38% -62% This week: Index Ticker Code 20 Day Moving Average Stocks Stocks Above Below 50 Day Moving Average Stocks Stocks Above Below 100 Day Moving Average Stocks Stocks Above Below 200 Day Moving Average Stocks Stocks Above Below JALSH 73% -27% 62% -38% 60% -40% 60% -40% TOP40 72% -28% 60% -40% 58% -42% 60% -40% RESI20 100% 0% 64% -36% 73% -27% 73% -27% FINI15 63% -38% 56% -44% 50% -50% 44% -56% JBNKS 100% 0% 86% -14% 86% -14% 57% -43% JGENR 82% -18% 64% -36% 55% -45% 64% -36% JSAPY 71% -29% 57% -43% 52% -48% 52% -48% 15

16 Home WEEKLY PERFORMANCES The week s best and worst performers: JSE ALLSHARE: 16

17 MIDCAP: 17

18 The best and worst performers for the last 6 months: 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. 18