adminJOHANNESBURG — Industrial shares pushed the major indices on the JSE higher yesterday morning and breached important resistance levels in the process, which is positive for future momentum.
It seems however investors are in for a rough ride in the foreseeable future because the market is very volatile, with traders using every dip in share prices to buy shares and every little run to take profit again.
After the strong run in share prices at the end of last week, the market pulled back on Tuesday, particularly resources shares, but all the indices were higher again yesterday.
Even analysts are not quite sure what will happen next as they expected a softer tone yesterday morning, which did not happen.
By midday yesterday, the All Share-index was 0.65 percent higher on 50,684 points while the Top 40-index increased with 0.58 percent to 45,240 points.
The Financial index edged 0.40 percent higher and the Industrial index gained 0.72 percent. By midday that index traded at 61,594 points, breaching the important resistance level of 61,160.
Imara SP Reid said in its daily market snapshot that if the breach is supported by decent volumes it could be a very positive indicator of future upward momentum.
In fact, the underlying medium term indicators for the market are good, but on the short term the Top 40-index is overbought and there could be profit taking around the corner.
The Resources index also improved and was 0.46 percent stronger after a strong upward surge just before midday. The Gold index increased with 0.95 percent.
The market is still supported by the weaker rand which softened somewhat this morning as the market awaits the latest retail figures.
One of the star performers was the Spar Group [JSE:SPG] which gained a massive 7 percent to trade at a new 52-week high of R142.96. The group announced an increase of 13 percent in its profit yesterday.
Amongst the other retailers Mr Price [JSE:MPC] is also on a 52-week high and gained another 1.71 percent to R239.01. The share price is now 43.1 percent higher over the last six months and 56.8 percent for the year.
Various food companies are also amongst those which are trading at 52-week highs. Tiger Brands [JSE:TBS] was 3.05 percent stronger on a new high of R336.29 after last week’s trading statement that its interim profit will be between 13 percent and 16 percent better than the corresponding period last year.
AVI [JSE:AVI] was 2.91 percent higher on a high of R74.25 and Pioneer Foods [JSE:PFG] gained 0.69 percent to R129.00.
The share prices of construction firms are however, still in the doldrums with big groups such as Murray & Roberts [JSE:MUR] and Aveng [JSE:AEG] at new 52-week lows, following a report that South Africa’s construction firms face collusion charges relating to the 2010 Fifa Soccer World Cup.
Murray & Roberts lost another 1.79 percent yesterday and its price of R22.25 at midday is now 27.6 percent lower than a year ago. Aveng lost 37.8 percent over the last year after the share price dropped another 2 percent to R18.12. — Fin24.
Online Reporter