Market trading below the 200-day Moving average

After a negative week last week around the world, the JSE is trading below the 200-day moving average. This is a bearish signal for long term investors. Also taken into account the Hindenburgh Omen that occured on the 12th of August, sitting in cash or buying into defensive stocks would be a safe bet at the moment.

The head and shoulders formation is now fully formed and the right arm is forming, thus we expect the market to go down to 26 000 before encountering some support. The 26000 level is crucial since a break and close below 26 000 would turn this support level into resistance.

The Nedbank HSBC deal has gone public and Old Mutual's share price has soared 5% on the opening of the market.

Resource shares has received some support out of Australia. The proposed mining tax has been put on hold for now after the recent elections that have taken place.

We expect the market to trade down further today.

Safe trading