Dow Jones stalls at resistance level

<p>Expecting a move higher towards the upside resistance targets has been achieved. Technically the markets still appear to be stuck within a range. However next […]</p>

Expecting a move higher towards the upside resistance targets has been achieved. Technically the markets still appear to be stuck within a range. However next week should prove interesting if we see further weakness develop. Right now the stock indices are creating a pivot high which suggests that if Monday continues to trade lower taking out today’s lows then the short term trend may turn bearish. We have not seen a bearish momentum reversal occur just yet but this would depend on how strong the reversal at the current resistance level becomes over the coming days. See key levels below:

FTSE 100 potential double top
Given the current pattern which has taken place at 5900 the FTSE 100 appears to be creating a bearish double top pattern. This indicates that the 5900 level is becoming a barrier for the index and it would need to climb above to tackle the 6000 level. Next week the index would need to break below 5865 to then test support at 5785. If a break does take place then we may also see the index weaken towards the 5700 target which could take place over a week or so. For upside continuation the index would need to move above 5900 and maintain the position for three days or more.

Dow Jones reverses at resistance level
13500 has proven to be a hurdle for the US Dow Jones index. Thursday saw an indecision day take place which suggested that the index may be uncomfortable at the current level. Today as the week comes to a close it appears as if traders may not want to take risks and collect on some of this week’s gains. Going into next week the index will need to move above 13500 to then move towards 13700. If the sharp move to the downside seen in today’s price action is not followed through on Monday then this could read as a standard pullback. Unless the index breaks 13420 it stands a chance to move higher.

Crude Oil heading into resistance target
This week has seen Crude Oil attempt to reach $96.30 but has fallen shy at $95.50 and may have another attempt next week. The commodity will need to remain above $92.60 if it has a chance of gaining strength to test the price target. However it is important to note that Crude Oil has remained in a bearish momentum phase since the last five weeks. The current move may be a consolidation before seeing lower prices. For a bullish move the commodity will need to move past $$96.30 to then test the $100 level which could prove to be a hurdle for the intermediate term.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.