South Africa Top 40 Index

Overbought: End of Day Thursday, 07 March 2024

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An overbought rating often overlaps with high bullish momentum however the long-side reward-to-risk can be unappealing. How can traders approach these shares and how can it lead to a trading opportunity?

The bullish price momentum could continue, however traders may want to look for early signs of a slowdown via: (1) poor candle candle structure on the lower (intraday) time frames.
The emergence of a neutral or bearish candle, for example: a ‘doji’, bearish engulfing, long upper tail etc combined with sizeable offers which may signal some institutional selling.

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