Bullish breakout or facing resistance again

Sandy Jadeja, Chief Technical Analyst at City Index, analyses the market to identify key technical levels for major commodities and indices markets including the FTSE 100 and Dow Jones this week.

Bullish breakout or facing resistance again?

This week has seen a nice trend to the upside for stock indices. The key focus is on if the indices will be providing a bullish breakout or just face a wall of resistance and fall back lower again. This has been a frustrating time for traders as there seems to be no clear direction just yet. However momentum has turned positive but at the same time some technical indicators are also showing a divergence against price. This is possibly suggesting that the move up may be weaker than it looks at the moment. Meanwhile Oil prices have ticked higher too and the opportunity for the bulls to take control could arise. Key price levels are provided below:

FTSE 100 back at wall of 5445

The last few trading sessions has helped gain positive momentum for the FTSE 100. At the point of writing the index is flirting with the 5445 level again and seems to be holding on to the ropes so to speak. In order to tackle the 5600 level the FTSE will need to close above 5445 for at least three days. The flipside is that the resistance level may push the index lower again as it has done in the past. 5340 would be the level to keep an eye on which would then confirm that the move up is still trading within the channel and 5015 should provide support.

FTSE 100 Daily

Dow Jones may see 11850

We are at the stage of seeing a potential breakout on the Dow Jones. But like other stock indices it also needs to see a sustained move above its current resistance level of 11472 which it is now attempting to break for the fourth time. Technically speaking if the fourth attempt fails to lift the index then a sharp move lower back down towards 10430 for a re-test could be possible. We would need to observe 11360 as a short term support level and as long as the Dow stays above this level into next week then we await to see if the move higher will materialise. The longer term trend still remains bearish.

Dow Jones Daily

Crude oil has an opportunity for $91.00

As expected Crude Oil has reached the $87.00 level after finding strong support at the $77.00 level recently. The commodity will need to ensure it stays above $81.00 next week otherwise a move lower to $77.00 is possible again. If Oil clears $87.00 then there is still a minor hurdle at $91.00 which if cleared opens the door to see $109.00 into November. Monday will need to see a trade above today’s high to confirm that the short term momentum can hold into early next week’s trading sessions. It is important to note that the longer term trend is still bearish in oil too.

Crude Oil

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