The JSE Industrial 25 Index inched 0.04% higher on Friday as it formed what is termed a “spinning top” or a candle with a small real body. Spinning tops identify a trading session in which there is little price action (as defined by the difference between the opening and the closing prices). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble. During the past 10 d…ays, there have been four bullish candles and six bearish candles for a net of two bearish candles. During the past 50 days, there have been 28 bullish candles and 22 bearish candles for a net of six bullish candles.
The JSE INDI 25 Index is trading within a narrow range and the medium trend is neutral as it tests the resistance at the 23.6% Fibonacci retracement level. The index price is still trading just above its 50 day moving average but far above its 200 day average and the long term trend remains bullish. The two technical indicators are giving mixed signals as the Stochastic Indicator is still moving downwards towards oversold levels, while the RSI Indicator is moving sideways in neutral territory.
Source: PSG Wealth (www.psg.co.za)