Can the current rally continue or is a reversal overdue?

<p>This week should we should see further evidence on how strong the rally really is. Since we are at important price targets it will be […]</p>

This week should we should see further evidence on how strong the rally really is. Since we are at important price targets it will be important for the indices to overcome the price levels to see a continuation higher. If the move higher continues the objective of reaching the previous highs is likely given that we are already very close to these targets. Momentum remains positive and hence the room for higher prices cannot be ruled out. However the concern is the narrowing of the range between the high and low coupled with divergence patterns across several indicators suggest that we may be at a short term exhaustion point. See key levels below:  

FTSE 100 clears target and now sees 5900.

Having achieved target the FTSE 100 index may now see 5900 as the next objective. Thereafter the index will need to see a sustained move to 6000. But right now we are seeing narrow range bars at the 5830 level and if the FTSE 100 fails to hold and trades below 5800 – 5780 this would indicate that the 5830 is a key resistance point and we may see the index fall back down to 5700 and the main objective being 5460 as a focal point. It is too early to suggest we are at a major reversal point until the index shows a very sharp move with strong momentum to the downside.

FTSE 100

Dow Jones aiming for a double top

A strong bullish close on Friday for the Dow Jones has lifted the index above 13190. But this week the market will need to stay above this level to then move ahead with the next target at 13270 and of course the old highs at 13338 as key targets. Like other indices the Dow Jones also remains positive with momentum and holding onto a series of higher highs and higher lows. Until a pattern as emerged to show that there are bearish signs the focus should be on the above price levels or else seeing a Weekly Reversal to negate bullish strength.

Dow Jones

 

Crude Oil reaches target perfectly

We have finally reached the $96.00 target for Crude Oil. Now that oil is at the target it will need to trade above last week’s high and get above both the $96.00 level as well as its 100 period moving average to continue higher. If the commodity can move above $96.00 then we could potentially be looking at $100 and then $106.00 as targets with higher prices ahead depending on how strong the move is and more importantly by staying above $92.60 in the coming weeks. We also note that if Oil does move higher we would also have created a higher low and longer term the $111.30 may be reached.

Crude Oil

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