JSE Relative Sector Summaries
- Lester Davids
- Apr 12
- 5 min read
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*Data after the close of trade on Friday, 11 April.
Key Takeaways:
Legend Interpretation:
Strong: Generally a buy signal.
Neutral: Hold, or be cautious.
Weak: Generally a sell signal.
High Bearish Momentum/Approaching Oversold: Potential for a short-term bounce or reversal, but still bearish overall. Consider buying cautiously for short-term gains, but be aware of the overall weakness.
High Bullish Momentum/Approaching Overbought: Potential for a pullback or correction. Consider selling or taking profits, as the bullish momentum might not be sustainable.
Oversold: Potential for a short-term bounce or reversal. Consider buying for short-term gains.
Overbought: Potential for a pullback or correction. Consider selling or taking profits.
Sector Analysis:
Technology vs Top 40:
Long Term: Neutral
Medium Term: Neutral
Short Term: Weak Analysis: This sector shows deterioration.
While neutral in the long and medium terms, it has turned weak in the short term, which carries the most weight, suggesting potential underperformance.
Miners vs Top 40:
Long Term: High Bearish Momentum / Approaching Oversold
Medium Term: Weak
Short Term: Neutral Analysis: This sector shows some improvement but remains concerning.
Despite high bearish momentum and approaching oversold conditions in the long term and weakness in the medium term, the short term is neutral. The weak medium-term and negative long-term momentum, despite a neutral short term, indicate a cautious outlook.
Banks vs Top 40:
Long Term: Neutral
Medium Term: Weak
Short Term: Neutral
Analysis: This sector shows deterioration.
While neutral in the long term, it weakened in the medium term and remains neutral in the short term. The recent weakness suggests potential underperformance.
Insurers vs Top 40:
Long Term: Neutral
Medium Term: Weak
Short Term: High Bearish Momentum / Approaching Oversold
Analysis: This sector shows deterioration. While neutral long term, it weakened in the medium term and shows high bearish momentum approaching oversold conditions in the short term, indicating significant downward pressure.
Gold Miners vs Top 40:
Long Term: Overbought
Medium Term: Overbought
Short Term: Overbought
Analysis: This sector shows consistent high demand across all timeframes. The overbought conditions in the short term, carrying the most weight, suggest a high likelihood of a near-term pullback.
Platinum Miners vs Top 40:
Long Term: Neutral
Medium Term: Neutral
Short Term: Strong
Analysis: This sector shows improvement. While neutral in the long and medium terms, it has become strong in the short term, indicating potential outperformance.
Consumer Staples vs Top 40:
Long Term: Weak
Medium Term: Weak
Short Term: Neutral
Analysis: This sector shows no improvement. It has been weak in the long and medium terms, and the neutral short term does not suggest any positive change.
Consumer Disc. vs Top 40:
Long Term: Weak
Medium Term: High Bearish Momentum / Approaching Oversold
Short Term: Neutral
Analysis: This sector shows some improvement but remains weak. While weak in the long term and showing high bearish momentum approaching oversold in the medium term, the short term is neutral. The persistent weakness suggests caution.
Healthcare vs Top 40:
Long Term: High Bearish Momentum / Approaching Oversold
Medium Term: Oversold
Short Term: Neutral
Analysis: This sector shows improvement but remains weak overall. Despite high bearish momentum approaching oversold in the long term and oversold conditions in the medium term, the short term is neutral. The oversold conditions suggest a potential for a bounce, but the neutral short term doesn't confirm it.
Hospitals vs Top 40:
Long Term: Weak
Medium Term: Weak
Short Term: Neutral
Analysis: This sector shows no improvement. It has been weak in the long and medium terms, and the neutral short term offers no indication of a positive shift.
Coal Miners vs Top 40:
Long Term: High Bearish Momentum / Approaching Oversold
Medium Term: High Bearish Momentum / Approaching Oversold
Short Term: Weak
Analysis: This sector shows consistent significant downward pressure and deterioration. With high bearish momentum approaching oversold in both long and medium terms and a weak short term, the outlook is negative.
Telecoms vs Top 40:
Long Term: Neutral
Medium Term: Neutral
Short Term: Weak
Analysis: This sector shows deterioration. While neutral in the long and medium terms, it has become weak in the short term, suggesting potential underperformance.
Paper & Pulp vs Top 40:
Long Term: High Bearish Momentum / Approaching Oversold
Medium Term: Weak
Short Term: Neutral
Analysis: This sector shows some improvement but remains weak. Despite high bearish momentum approaching oversold in the long term and weakness in the medium term, the short term is neutral. The persistent weakness suggests caution.
Chemicals vs Top 40:
Long Term: Oversold
Medium Term: High Bearish Momentum / Approaching Oversold
Short Term: Weak Analysis: This sector shows deterioration despite long-term oversold conditions. The medium term shows high bearish momentum approaching oversold, and the short term is weak, indicating continued downward pressure.
Luxury Goods vs Top 40:
Long Term: Neutral
Medium Term: Neutral
Short Term: Neutral
Analysis: This sector shows consistent neutral performance across all timeframes, indicating performance in line with the broader market.
Overall Summary (Weighted by Short Term):
Strongest Sectors:
Platinum Miners vs Top 40: Shows improvement and strength in the short term.
Weakest Sectors:
Insurers vs Top 40: Deteriorating with strong bearish momentum in the short term.
Coal Miners vs Top 40: Consistent strong bearish momentum and weakness in the short term.
Chemicals vs Top 40: Deteriorating with weakness in the short term despite long-term oversold conditions.
Technology vs Top 40: Deteriorating with weakness in the short term.
Telecoms vs Top 40: Deteriorating with weakness in the short term.
Sectors with Mixed Signals (Require Careful Monitoring):
Miners vs Top 40: Negative long and medium term, neutral short term.
Banks vs Top 40: Neutral long term, weak medium term, neutral short term.
Gold Miners vs Top 40: Consistent overbought conditions across all timeframes, suggesting a potential pullback.
Consumer Staples vs Top 40: Weak long and medium term, neutral short term.
Consumer Disc. vs Top 40: Weak long term, bearish momentum medium term, neutral short term.
Healthcare vs Top 40: Negative long and medium term, neutral short term.
Hospitals vs Top 40: Weak long and medium term, neutral short term.
Paper & Pulp vs Top 40: Negative long and medium term, neutral short term.
Luxury Goods vs Top 40: Consistent neutral performance.
Conclusion:
Based on the weighted analysis, the Platinum Miners sector shows the most positive short-term outlook. Conversely, the Insurers, Coal Miners, Chemicals, Technology, and Telecoms sectors appear to be facing the most significant short-term headwinds. Several other sectors present mixed signals and warrant close attention to see if short-term neutrality evolves into a clearer trend. The consistently overbought condition of the Gold Miners sector suggests a potential near-term correction.
Lester Davids
Analyst: Unum Capital
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