A push higher may lift indices above resistance
City Index September 19, 2012 3:00 PM
<p>So far with the indices at technical resistance levels there seems to be strength showing that may lift the markets higher. Despite reaching an extended […]</p>
So far with the indices at technical resistance levels there seems to be strength showing that may lift the markets higher. Despite reaching an extended level so quickly, traders have observed that the markets are indeed resilient to selling pressure at least for now. Many Bears have questioned the current rally but one cannot argue with the tape. If the markets are determined to move towards the upside then the best play of action is to follow the trend. And since we have seen bullish trend reversals from the start of this month the results have been positive. On the commodities side gold has also remained strong. See key levels below:
FTSE 100 has a minor pullback
Now that the FTSE 100 has achieved its target for the upside, will a chance of a meaningful reversal take place? There are two obvious options for the index at present. Either the index will revert back lower to test the previous resistance at 5830 to then move higher towards new highs or we can see a trend continuation from current levels. On a very short term basis the index will need to clear past 5895 to then reach for 6000 or a failure below 5830 may see a short term correction drag the index beyond 5830 towards the 5700 level. Until we see a breakout of these two levels the index may be stuck in a short term range.
Dow Jones holds onto 13550 level
This index has certainly shown strength over the last few weeks. And with bullish momentum intact there appears to be room for further upside moves into the end of this week. It may be that if the index decides to trail lower then like other indices it may also seek support at the previous resistance barrier of 13338. We can see the series of higher highs and higher lows still in firm place with no clear patterns of reversal taking place on the intermediate time frame. But for short term traders the key immediate support level rests at 13512 which if violated may see the index fall lower. A move above 13593 may see 13700 reached.
Gold price stay firmly bullish
With a strong bullish move lifting gold prices right into the initial target of $1,770 we are seeing the commodity hold onto this level so far this week. Ideally the metal could stay here to hesitate before pushing higher to reach the next objective of $1,840 over the coming weeks. On a short term basis the price of gold will need to remain firmly above $1,770 by the close of this week. Otherwise a minor correction may be at hand which could last for three to seven days. More importantly the trend remains bullish as per momentum and likely to lift Gold higher into October.
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