The Market Rebounds towards Resistance at 52,500

The Market Rebounds towards Resistance at 52,500

After a wild two weeks, the Top40 is quickly approaching a key resistance level as the US dollar softens. This is on the back of US Jobs data that signals the Fed will hike gradually. And “Trade War” fears that have subsided. 

 

This risk on sentiment has seen investors buying the dip and remaining bullish. Last night we had the Dow up almost 1% and the S&P up 0.70%. This will provide some support to our market as investors start taking profit, awaiting a break above the key 52,500 resistance on the Top40 future. 

 

The volatility we have seen in the past few weeks, shows just how fickle investor sentiment can be, you must remain focused on your longer-term strategy and not be drawn into the “Panic”.  

 

Global investors will be looking at 2nd quarter earnings for cues on the health of the global economy and where the market is headed next. 

 

Investors should remain cautious ahead of a confirmed break above resistance, and look to buy quality shares, with good long-term prospects, stocks like Discovery, Coronation, Dischem and few of the buys noted in the long-term ideas below. 

 

The week ahead: 

  • Local Data: Mining Production and Sales; Manufacturing Production and Sales (12/07) 
  • Results Due: ALP (11/07); NFP, PBG (13/07) 
  • LDT (10/07):  AME, FGL, MMP, OMN, SAR, SRE, NHL and Various Coreshares, Stanlib and Satrix ETFS 

Last week’s movers and shakers… 

Best Performers: SNH 29.5%, TSX 16.1%, NHM 8.8%, HAR 8.2%, KIO 7% 

Worst Performers: GLN -10.6%, GND -7.7%, DRD -5.2%, DTC -4.6%, ADR -4.3% 

 

Other Economic data releases of interest… 

  • Tuesday: GDP (UK) 
  • Wednesday: ECB President Draghi Speaks (EU); BOC Monetary Policy Report, BOC Rate Statement, Overnight Rate, BOC Press Conference (CAN); Crude Oil Inventories (USA) 
  • Thursday: CPI (USA); ECB Monetary Policy Meeting Accounts (EU) 
  • Friday: Trade Balance, Unemployment Rate (CAN); Average Hourly Earnings, Non-Farm Employment Change, Unemployment Rate (USA) 

 

None to Buy or Sell 

 

Long Term Ideas 

  • Discovery: Buy below R150. 
  • Coronation: Bottoming out, buy below R60.00 for a move back to R80 
  • AB InBev: Place a stoploss at R1,350 to lock in 8% gain. Target remains R1,475. 
  • ARM: 10% open gain at R121. Hold 
  • Dischem: Add below R30.00 
  • Shoprite: Bulls back in control. Hold. 
  • Aspen: Accumulate on weakness below R260. 
  • Sygnia: Support building above R10.00. Add 
  • Santova: Maintain stop loss at R3.10. Hold 
  • Merafe: Accumulate below R1.55. 
  • Jubilee: Speculative buy below R0.50.  
  • MTN: Accumulate for long term below R110.00. 
  • Glencore: Still bullish. Hold 
  • Wescoal: Long term buy. Add below R1.80 
  • Naspers: Trying to break above R3,500. Hold 

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