Weekly Technical Report 3 October 2016

Transcription

1 Weekly Technical Report 3 October 2016 Contents (ctrl+click to follow link): SP 500 ; Top 40 Chart ; Currency ; Commodities ; Charts of Interest ; Relative Rotation Graph ; Sector Analysis ; Weekly Perfomances 1

2 SP 500 The upward support trend line is still providing price support for the SP500. Currently we are forming a triangle and a break out of this triangle and I dare say the previous resistance of 2160, we could see the SP500 reach We are trading at the 50 day moving average. HOME 2

3 TOP 40 CHART The Top40 continues to trade in its year-long trading range and remains choppy and sideways. A smaller channel has developed between and The Top40 is currently trading at its 200 day moving average. HOME 3

4 CURRENCY The Rand The Rand is forming a triangle with support now being roughly at 1400 and resistance at There is a smaller support line at the 1390 level. HOME 4

5 COMMODITIES The gold price continues to trade in a sideways price channel of between $1308 and $1365. Below the gold chart are the performances of the platinum and silver price against the gold price. Gold is preforming in line with silver and continues to outperform platinum. HOME CHARTS OF INTEREST The charts we have included are: AGL, BIL, GLN, ARM, SAP, CPI and PSG 5

6 A number of resource stocks have gapped out of consolidation patterns as shown below. Anglos has broken out of a triangle and the breakout provides a potential target of R215. A small gap has opened at the R167 level and may still close before resuming its upside target. Support is at R160. 6

7 Billiton has gapped up out of its sideways channel. The price target of the channel is R225. A large gap has opened at R197 and so a pull-back is likely to the top of the channel which is now support. 7

8 Glencore has broken up out of its sideways channel. The price target of the channel is R44. A small gap has opened at R37.5. We also have support at the top of the channel which is R36. Glencore is also trying to break up through a downward trending resistance line that started in July

9 African Rainbow Minerals is not breaking out as in the previous three charts, but is at support at the R79 level and may bounce from here. 9

10 Sappi is trading in a symmetrical triangle. A break to the upside will give a possible count to R87. 10

11 Capitec is trying once again to break out of an ascending triangle which provides a possible target of R766. However, there also seems to be a possible rising wedge developing where the top is approximately R670. This is a negative formation and if the price breaks through the bottom of the rising wedge we could see a downside target of R

12 PSG has pretty much held the neckline of a large head and shoulder pattern. The price has now forming a triangle and a break to the upside provides a possible target of R228. HOME 12

13 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. CGoods Indu CServ Prop Fin BMat Tele Health 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 ANB 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 13

14 S32 SNT RBX RPL SGL All stocks have equal weighting in their relevant REM SAC SOL indices TRE TWR VKE Explanation on the RRG: Basic materials, healthcare and financials are in the yellow quadrant. Industrials and consumer services are in the green quadrant. Consumer goods, property and telecoms continue to have low momentum and are underperforming the Allshare index (red quadrant). SAB has been removed and Anbev has been added hence the change in movent. 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. 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 14

15 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 This week: INDEX 200 SMA 100 SMA 50 SMA 20 SMA Banks Gen Retailers Resource Industrial Financial Property

16 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 55% -45% 50% -50% 58% -42% 67% -33% TOP40 37% -63% 30% -70% 42% -58% 53% -47% RESI20 36% -64% 55% -45% 55% -45% 91% -9% FINI15 44% -56% 31% -69% 44% -56% 50% -50% JBNKS 100% 0% 86% -14% 100% 0% 100% 0% JGENR 55% -45% 36% -64% 45% -55% 64% -36% JSAPY 48% -52% 38% -62% 43% -57% 52% -48% This 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 50% -50% 42% -58% 55% -45% 63% -37% TOP40 33% -67% 19% -81% 44% -56% 51% -49% RESI20 45% -55% 45% -55% 55% -45% 82% -18% FINI15 44% -56% 6% -94% 44% -56% 50% -50% JBNKS 86% -14% 43% -57% 100% 0% 100% 0% JGENR 27% -73% 36% -64% 36% -64% 55% -45% JSAPY 62% -38% 33% -67% 52% -48% 57% -43% HOME 16

17 WEEKLY PERFORMANCES The week s best and worst performers: JSE ALLSHARE: MIDCAP: 17

18 HOME Compiled by Kevin Barlow-Jones and Simon Hobday Disclaimer This report provides general information only. Information is sourced from Bloomberg and charts from Metastock. 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