FTSE 100 trading at resistance level

The recent downswing experienced with the stock indices has seen a counter trend rally back to the upside. However, can we be certain that the rally will extend? The nature of the markets is such that there are no certainties but at times the markets can offer subtle clues to provide a slight edge which may favour a directional move. Currently the UK FTSE 100 index had turned positive with a minor bullish trend but Monday’s price action has failed to lift the index above a key level and also suggests that the trend may be about to reverse if we do not see a follow through immediately. See key levels below:

FTSE 100 back at resistance level
Recently the FTSE 100 index had found support above 5580 and managed to thrust higher. On clearing 5700 the route to 5830 had opened up and last week also saw a trend reversal on the bullish side emerge. Friday had traded above Thursday’s high but this week Monday has seen the reappearance of a potential bearish setup. If today sees a break below yesterday’s low at 5773 then this could suggest a decline could commence and take the index back down to 5700 followed by 5580 as the main objective. A move above 5830 would negate the bearish view to see 5900 as an upside potential.

Dow Jones creates a reversal bar
As Tuesday’s trading session kicks off the index will need to trade above 13008 but more importantly above 13060 to move higher But the bears may just take control again as the current trend remains bearish on a momentum basis event though the last five trading sessions were to the upside. We may consider the current move as a retracement to the upside unless we see a higher low followed by a higher high. Failing to clear 13060 the Dow Jones may once again decline to test the 12360 level before finding a key support level to then rally into December ending the month on a high note.

Crude Oil holding support levels
For the last five weeks Crude Oil has managed to hold onto support at $89.00 and move towards $96.30 as the upside resistance level. The worrying aspect for the bulls is that the trend remains bearish on a momentum basis and rallies may face further selling pressure. Also the current attempt at pushing higher has appeared to be weak rather than strong indicating that we may not reach the $$96.30 target and instead trade below $89.00 to then continue falling towards $80.80 and possibly lower. If Oil does manage to clear $96.30 then higher levels come in at the key $100.00 level.