The Deathly Crocodile’s Mouth shows more downside to come!
In the weekly chart of the JSE ALSI 40, you can clearly see that it’s been going on an uptrend since July 2013!
But in July 2014, the ALSI 40 started to accelerate on an even steeper uptrend.
This looks like a crocodile’s mouth.
Whenever you see any index going up a steeper uptrend, higher than 45 degrees, this should send warning bells to you.
This is when you can expect it to start to lose momentum and become more unstable, and that’s when it breaks below the steep uptrend.
As soon as the steep uptrend is broken, this is when people start to panic and so they sell their stocks to try lock in profits.
When the price breaks below the steep uptrend, this is where I say the ALSI 40 entered into the ‘Deathly Crocodile’s Mouth’.
So, where is its next target?
That’s right! Down to the bottom of the crocodile mouth at 40,736 level, where the first uptrend started.
This is why, I expect the ALSI 40 index to drop 7.75%, from where it is right now!
How you can bank 111.29% while the JSE falls down the ‘Deathly Crocodiles Mouth’
If you want to take profit from the fall, then you’ll need to trade using the ALMI.
The ALMI is a financial instrument that is the miniature and cheaper version of the ALSI future contract. Instead of paying R23,823.50 for the full contract, you’ll only pay 1/14th
of the price (R3,074) for one ALMI contract.
Which is why I say, it’s CHEAP!
All you need to know is that for every 1% the ALSI 40 falls, and you go short, you’ll make 14.36% gain on your trade.
So, if the ALSI 40 falls to the 40,736 level, you’ll bank a whopping 111.29% gain, by going short the ALMI.
So, now you know how to profit from the falling ALSI 40!
“Wisdom yields Wealth”
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