JSE Wyckoff Wave Analysis
Updated
In this analysis I have considered a Wyckoff Wave (WWave) for the JSE and its associated volume.The Stock Market Institute (SMI) describes an propriety indicator the "SMI Wyckoff Wave" for US Stocks. This is my attempt to make a Wyckoff Wave for the Johannesburg Stock Exchange (JSE).
The Code for this JSE Wyckoff Wave and associated Volume for this wave is linked below.
The Wave presents a normalized price for the 10 selected stocks (An Index for the 10 stocks). The theory is to select stocks that are widely held, market leaders, actively traded and participate in important market moves. This is only my attempt to select 10 stocks and a different selection can be made.
I am not certain how SMI determine their weightings but what I have done it to equalize the Rand value of the stock volume so that moves are of equal magnitude. The then provides a view of the overall condition of the market and volume flow in the market. I have used the September 2018 price to normalize the stock price for the 10 selected stocks based. The stocks and weightings can be changed periodically depending on the performance and leadership.
The stocks and their weightings are:
"JSE:BTI"/0.79
"JSE:SHP"/2.87
"JSE:NPN"/0.18
"JSE:AGL"/1.96
"JSE:SOL"/1.0
"JSE:CFR"/4.42
"JSE:MND"/1.40
"JSE:MTN"/7.63
"JSE:SLM"/7.29
"JSE:FSR"/8.25
Analyzing the wave I make the following conclusions:
- The WWave has been trading in a upward channel since the beginning of 2016.
- The WWave found resistance with a Buying Climax (BC) after a throw over of the overbought line.
- After the BC the WWave has been very week with strong volume on the down moves (especially at Futures Closeouts) and low volume on rallies.
- The market has been in a range but only finding support below the Automatic Rally (AR).
- However, the volumes have declined with each subsequent down wave back to support and with the September Closeout a rally and not decline was seen. Although, the rally was week with effort but little response.
- The WWave is now at the oversold line of the upward stride.
We need to watch to see if there is going to be a change of character with increased volume on rallies or the support line of the range and channel is broken. At this key junction next week will be key to see if demand or supply triumphs.
The Code for this JSE Wyckoff Wave and associated Volume for this wave is linked below.
The Wave presents a normalized price for the 10 selected stocks (An Index for the 10 stocks). The theory is to select stocks that are widely held, market leaders, actively traded and participate in important market moves. This is only my attempt to select 10 stocks and a different selection can be made.
I am not certain how SMI determine their weightings but what I have done it to equalize the Rand value of the stock volume so that moves are of equal magnitude. The then provides a view of the overall condition of the market and volume flow in the market. I have used the September 2018 price to normalize the stock price for the 10 selected stocks based. The stocks and weightings can be changed periodically depending on the performance and leadership.
The stocks and their weightings are:
"JSE:BTI"/0.79
"JSE:SHP"/2.87
"JSE:NPN"/0.18
"JSE:AGL"/1.96
"JSE:SOL"/1.0
"JSE:CFR"/4.42
"JSE:MND"/1.40
"JSE:MTN"/7.63
"JSE:SLM"/7.29
"JSE:FSR"/8.25
Analyzing the wave I make the following conclusions:
- The WWave has been trading in a upward channel since the beginning of 2016.
- The WWave found resistance with a Buying Climax (BC) after a throw over of the overbought line.
- After the BC the WWave has been very week with strong volume on the down moves (especially at Futures Closeouts) and low volume on rallies.
- The market has been in a range but only finding support below the Automatic Rally (AR).
- However, the volumes have declined with each subsequent down wave back to support and with the September Closeout a rally and not decline was seen. Although, the rally was week with effort but little response.
- The WWave is now at the oversold line of the upward stride.
We need to watch to see if there is going to be a change of character with increased volume on rallies or the support line of the range and channel is broken. At this key junction next week will be key to see if demand or supply triumphs.
Note
The Wyckoff Wave stride has been broken and accelerated to the downside. Supply has been occurring on decreasing volume which seems to be due to declining demand not increasing supply. The lack of demand in the JSE is effecting all the sectors showing sharp declines. Note
After a backup to the trading range we can expect the mark down to continue.Note
Markdown continues. Expecting some support at the previous markup range.
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