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That is the view of technical analysts of the trading patterns at the JSE, where the market opened sharply lower on Friday morning and then clawed its way back, but not enough to be in the black. Thursday was similar, with the market also recovering towards the end of the day but not enough to recoup all the losses.
By midday the All-share index was 0.29% lower at 47 966 and the Top 40 index was 0.38% lower at 42 760. At the beginning of the day the All-share index lost almost 300 points, but recovered more than half the losses.
Imara SP Reid said in its daily Market Snapshot the important Top 40 index is in the immediate short term engaged in a crucial battle, with support emerging from those market participants who maintain a bullish stance while residual pressure continues to inhibit upside momentum.
Among the major indices the Financial index rose 0.03% and the volatile Gold index increased by 2.09%, but the Industrial index was 0.50% lower and the Resources index slipped 0.30%.
The residual selling pressure stems from the inability of the Top 40 index to breach the important resistance level of 43 600 earlier this week.
The movement of the market will depend very much on what happens on Wall Street later on Friday.
On Thursday the US market delivered an impressive performance on the back of better than expected company results, particularly Caterpillar.
It must be seen however how the market will react to the news that the first Ebola case was reported in New York, which sent shock waves through the European markets. European banks are also nervous about the results of stress tests of the banking sector which are due this weekend.
READ: European shares fall after New York Ebola case
Imara SP Reid said the important US indices are now trading at levels where resistance had previously materialised. Earnings numbers at the close of the week and early in the following week will determine the sustainability of the market's performance at current levels.
In the resources sector, and the platinum sector in particular, various shares tested new intraday 52-day lows before recovering somewhat.
By midday on Friday Impala Platinum [JSE:IMP] was 0.33% stronger at R81.57 after testing a 52-week low of R80.32. Northam Platinum [JSE:NHM] was on a new low of R33.20 before steadying, and at midday traded 0.30% higher at R33.75. Aquarius Platinum [JSE:AQP] traded 0.33% stronger at R3.01 after dropping to a new low of R2.95.
- Fin24
