JSE ALSI 40 poised for upside this year - Target 84,298

TECHNICALS

Symmetrical Triangle has formed on the daily since I would say 10 August 2023.

There are good technical signs that a breakout to the upside is imminent.

First we have a long term upward range from 2020 which the price continues to bounce off the uptrend.

Second we have a trending 200MA which the price still needs to break above as it's been in a pathetic sideways range for the last year.

JSE traders know what I'm talking about.

But once we get that breakout, we could see a target of 84,289

FUNDAMENTALS

Index Rebalancing and Convergence

There's a note on the JSE’s planned index harmonization which could affect the ALSI and Swix indices, aiming for a convergence by March 2024.

INDEX PERFORMANCE

This adjustment might influence the index's composition and performance, potentially affecting investor sentiment positively depending on the specifics of the harmonization.

This can increase investor confidence in the index as a benchmark, potentially leading to more investment in products tied to the index, such as ETFs and mutual funds.

BALANCE EXPOSURE!

Also there could be better balance exposure across stocks or sectors, reducing volatility and appealing to risk-averse investors.