JSE Where are we at?Starting 2021 we find that the recovery from the Covid lows is still in progress. After a pullback and low formed in October 2020 we are seeing another push higher. Resources are again showing the most strength with a nearly 40% rise. However, financials are also recovering well at this stage but industrials are lagging. Over the holiday period, we have seen a push higher on lower volume but now we are finding a shoring of the stride. Watch for the next pullback in 2021 for the next opportunities.
J210
JSE Resource Index: Looking for OpportunitiesThe JSE Resources Index (J210) is the one potential light in the tunnel. We have been in an uptrend since 2016 and even after the covid drop recovered to top of the upward stride. Recently we have seen a pullback from the overbought line on low volume. So now we start looking for when the price reaches the oversold line to take opportunities for the next leg up. At the current rate, the next push up could only take place in January 2021 so some patience is required.
J210 -RESI10JSE:J210
Trading in well defined up channel for few years already. Had one false break above and as old saying goes "From false move comes fast move" we can expect it go to the bottom of the channel.
On top of that there is clear double top with neck line been tested and just hold on Friday.
$J210 Resources monthly chart - not at levels to chase. Explanation in the chart. Not an area i would be getting involved in commodity stocks on the JSE. Probability favours consolidation and a retracement in the sector.
Resource Still Showing StrengthSince 2016 the JSE has been declining relative to the S&P 500 but December has shown a change in character with the JSE consolidating while the S&P 500 declined. The Resources sector has been leading the charge and trading in a strong upward channel. In December the resource has reacted to the demand line and is showing strength going into 2019. Resources are further the only sector above its January 2018 high.