An update on the JSE Top40
An update on the JSE Top 40
![An update on the JSE Top40](/content/images/size/w1200/2021/06/graeme_ab.jpg)
![](https://stockpicks.co.za/content/images/2021/06/image-15.png)
The JSE Top40 appears set for another long period of sideways consolidation such as we saw earlier (see dashed zones marked C-c
and D-d
).
In each of the previous sideways moves, we saw the long-term RSI trending downwards : take a look at the RSI directly below zones C-c
and D-d
.
The recent good performance of the Top40 broke down on the RSI at the point marked a
, and began a clear descent along the red line marked e
.
Referring back to the price chart, this clearly aligns with the area shown in pink, above b
, which we describe as a stage 3 top. These most often precede a breakdown (which would likely indicate a move back to the Medium-Term Trend-line, somewhere around f
) or else another multi-year sideways consolidation such as we have seen before. This is, in my view, more likely.
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