Bullish JALSH, Favouring Mining Stocks

The Johannesburg All-Share Index (JALSH) may have traded down from its close on August 24, dipping as much as 1.2% to 24,978 in early trading on August 25, but we continue to like South African equities. The previous day's close of 25,274 was a 12-month high and represented not only a 5.4% gain over the preceding four days, but also a recovery of 42.2% from the index's three-year low reached in November 2008. Having sustained since the end of July a break through key resistance at around 24,000, the index is now well supported at this level. Furthermore, with the monthly MACD indicator giving a convincing 'buy' signal, we continue to look for further gains towards 28,000 .

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