Six Research Notes Which Helped Our Clients This Week

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This week, some clients took advantage of the enormous volatility.

Well done to those who profited. To those who haven't been participating, get involved, there's money to be made.

Below are six research notes from this week which helped clients manage risk, understand the current environment and uncover opportunities:

(1) Global Market Breadth / Russell 3000 & S&P 500 | US equity market breadth was completely washed out. This highlighted the pending (and appealing) reward-to-risk. On Wednesday, US stocks had it's best day since October 2008. Read the original note here: https://www.unum.capital/post/rus3k and here https://www.unum.capital/post/us200day

(2) Market Risk Index / Nasdaq +10% Rally | On Wednesday morning, the Market Risk Index was screaming at us!!!. I published that note in real-time with a further update on the Nasdaq which rallied by over 10% into the evening. You can read that update here: https://www.unum.capital/post/oppspot

(3) Actionable Areas: FSR and Prosus | For every trader, this should be the continuous question: "Where is the next best level to buy and where is the next best level to sell?". As of Thursday morning, FirstRand rallied by more than 20% from Monday's provisional buy re-entry range. Prosus traded into the buy re-entry range (72000c to 73000c) and then rallied to an intraday high of 81800c. A 1-day intraday gain of 12%. The updated and original notes can be found here: FSR https://www.unum.capital/post/firstcash and PRX https://www.unum.capital/post/prosusgen

(4) Brent Crude Oil: The note was an update to the weekly structure (a further breakdown) while the price action model recognized the ultra short term oversold conditions with both the short and medium term readings pointing to an appealing buy/long reward-to-risk. The commodity subsequently rallied between 7 and 10%. You can read the update here: https://www.unum.capital/post/brentsvn

(5) Local Market Breadth / JSE Mid & Large Caps | The note highlighted that out of the 98 shares with a market cap above R10bn, 40 of them closed in an oversold range. This, was a rarity and highlighted the extremely broad-based oversold conditions. Our comment include the following: ...."This widespread oversold reading may point towards a potential near-term buying opportunity as the large number of stocks at these levels could be poised for a rebound...." You can read the updated and original note here: https://www.unum.capital/post/breadthreward

(6) JSE Top 40 Index | Original note here: https://www.unum.capital/post/fortyweekly

What the note contained...

"Short Term (1 to 10 days): The short-term reading is Oversold. This suggests that the index has likely experienced a significant decline and may be due for a rebound or consolidation. However, being oversold alone doesn't guarantee an immediate reversal."

Our initial assessment of the key levels...

As of Thursday morning (09h09), this is how it's going...a 10% rally. Notice the Monday drop into the prior swing lows as per the above price action reading?

Connect with the trading desk today. E-mail tradingdesk@unum.co.za

Lester Davids

Analyst: Unum Capital