Markets at key resistance targets with signs of a slowdown

The markets have successfully reached targets. Now we wait to see if the targets will provide a wall of resistance or a pause to then tackle the next level. However before turning overly bullish there are some concerns at the current levels. Typically when a market reaches an important price target we often see price contraction, which is where narrow range bars come into play and this is what has taken place over the last two days of trading. This does not mean that the reversal is for certain but it does allow traders to tighten stops and manage gains up to current levels. Going into next week should provide further important clues. See key levels below:  

FTSE 100 reaches target of 5830

The FTSE 100 has finally reached the 5830 level after several weeks of patience. The bullish momentum reversal as indicated by the blue bars has provided a good indication of positive price action to lift the index higher. Now that we are at 5830 the important aspect to observe is how the index reacts at this level. If it fails to hold above this price then the index would need to break below 5780 to reverse to the downside. If we do hold above this resistance level then an opportunity to seek 5900 may open the doors to the 6000 level over the coming two weeks. For now we shall see how 5830 behaves.

FTSE 100

Dow Jones at a key level 13190

So far the US Dow Jones has performed as expected by reaching the 13190 target as previously highlighted. In line with bullish momentum the index has managed to deliver the results. But similar to other indices the index is also showing some signs of price exhaustion or at least a slowdown. The narrow range bars may be providing some clues as to a possible reversal at the current level. If Friday closes below the level and next week trades below this week’s low then a short term high may be in place. A continuation to 13270 may be viable if the index can hold above 13190 by next week.

Dow Jones

Crude oil at an important juncture

In line with the forecast the price of Nymex Crude Oil has reached $96.00 and is at an important price level. We note that not only a technical resistance but also the intermediate term 100-week moving average has also been reached. At the same time a bullish weekly momentum reversal is taking place. Next week the price of oil would need to break above this week’s high and not trade below this week’s low to confirm a trend reversal may be at hand. This could then take oil above the $100.00 level and target $106.00.

Crude Oil