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*Data as of Thursday, 20 March (pre-market).
Summary:
Strongest Sectors: Technology, Gold Miners, and Platinum Miners show the most promising trends.
Weakest Sectors: Miners (excluding Gold and Platinum), Consumer Staples, Healthcare, Coal Miners, Paper & Pulp, and Chemicals are experiencing significant challenges.
Volatile Sectors: Insurers exhibit high volatility in the short term.
Key to Understanding the Analysis:
Color Coding: The color coding in the table helps visualize the strength (green), weakness (red), or neutrality (yellow/orange) of each sector.
Momentum & Overbought/Oversold: These indicators provide additional context to the strength or weakness. High bullish momentum approaching overbought suggests a potential pullback, while high bearish momentum approaching oversold suggests a potential bounce.
Timeframe Weighting: Short-term changes are given the most importance, followed by medium-term, and then long-term.
Sector-by-Sector Analysis:
JSE Sector performance based on the above table, focusing on the short-term trends as the most significant, followed by medium and then long term.
Sector-by-Sector Analysis:
1. Technology vs. Top 40
All Timeframes: Strong across all timeframes (Short, Medium, Long).
Overall: This sector is consistently performing well with strong positive momentum.
2. Miners vs. Top 40
Long & Medium Term: High Bearish Momentum/Approaching Oversold.
Short Term: Weak.
Overall: Significant weakness across all timeframes. The sector is experiencing a strong downtrend and is potentially oversold, suggesting a possible, though uncertain, reversal in the future.
3. Banks vs. Top 40
Long Term: Neutral.
Medium Term: Weak.
Short Term: Neutral.
Overall: Deterioration from neutral to weak in the medium term, but recovering slightly to neutral in the short term. The short-term neutrality might indicate a pause in the decline rather than a strong recovery.
4. Insurers vs. Top 40
Long Term: Neutral.
Medium Term: Weak.
Short Term: High Bearish Momentum/Approaching Oversold.
Overall: The medium-term weakness suggests underlying challenges. The long-term neutrality indicates no clear trend.
5. Gold Miners vs. Top 40
Long Term: Strong.
Medium Term: High Bullish Momentum/Approaching Overbought.
Short Term: High Bullish Momentum/Approaching Overbought.
Overall: Strong performance, with bullish momentum in the medium and short term. This sector is showing clear signs of strength and potential for further growth.
6. Platinum Miners vs. Top 40
Long Term: Neutral.
Medium Term: Strong.
Short Term: High Bullish Momentum/Approaching Overbought.
Overall: Significant improvement from neutral to strong in the medium term, with continued bullish momentum in the short term. This sector is gaining strength.
7. Consumer Staples vs. Top 40
Long Term: Weak.
Medium Term: Oversold.
Short Term: Weak.
Overall: Consistent weakness across all timeframes. The oversold condition in the medium term might lead to a temporary bounce, but the overall trend is negative.
8. Consumer Discretionary vs. Top 40
Long Term: Neutral.
Medium Term: Weak.
Short Term: Neutral.
Overall: Similar to Banks, a deterioration in the medium term with a slight recovery to neutral in the short term. The short-term neutrality might be temporary.
9. Healthcare vs. Top 40
Long Term: High Bearish Momentum/Approaching Oversold.
Medium Term: Oversold.
Short Term: Oversold.
Overall: Consistent weakness and oversold conditions across all timeframes. This sector is facing significant challenges.
10. Hospitals vs. Top 40
Long Term: Weak.
Medium Term: Weak.
Short Term: Neutral.
Overall: Weakness in the long and medium term, with a slight stabilization to neutral in the short term.
11. Coal Miners vs. Top 40
All Timeframes: Weak.
Overall: Consistent weakness across all timeframes. This sector is underperforming.
12. Telecoms vs. Top 40
Long & Medium Term: Neutral.
Short Term: Weak.
Overall: Deterioration in the short term, indicating potential challenges ahead.
13. Paper & Pulp vs. Top 40
Long Term: High Bearish Momentum/Approaching Oversold.
Medium & Short Term: Weak.
Overall: Consistent weakness with potential oversold conditions in the long term.
14. Chemicals vs. Top 40
Long Term: Oversold.
Medium & Short Term: Weak.
Overall: Consistent weakness with oversold conditions in the long term.
15. Luxury Goods vs. Top 40
Long & Medium Term: Neutral.
Short Term: High Bearish Momentum/Approaching Oversold.
Overall: Deterioration in the short term with potential oversold conditions, suggesting possible future challenges.
Lester Davids
Analyst: Unum Capital
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