Markets currently weak below resistance levels
City Index August 29, 2012 2:40 PM
<p>So far the stock indices have managed to find resistance at our upper price targets. The price action of recent suggests that the markets appear […]</p>
So far the stock indices have managed to find resistance at our upper price targets. The price action of recent suggests that the markets appear to be weakening but with the Fed speaking at the end of this week volatility should be accounted for. Although the trend remains bullish on a momentum basis, if the markets fall lower then this could change the dynamics. But until this has taken place the upper resistance targets could still be retested. Depending on how strong the resistance is traders will have to wait for further evidence before turning full blown bearish just yet. See key levels below:
FTSE 100 could see lower prices.
Trading below 5830 the FTSE 100 may be seeking to trade lower. As this is an important resistance level the weaker the index becomes the lower the downside support. Currently the index may seek to find support at 5700 but the main objective is much lower at 5460. However the FTSE 100 will need to start accelerating lower very soon as the longer it stays at current price levels, the stronger the opportunity to head higher towards the 6000 target. Each decline so far has been followed by a rally and if the present situation is to follow suit like the previous patterns then another move higher may still be a possibility.
Dow Jones trading between 2 levels.
At present the Dow Jones is trading between two resistance levels. The 13060 and 13190 have both been the upside targets for the index. Having surpassed the 13190 target and also breaking above the May high the index has shown strength which is in line with the bullish trend. Right now the Dow Jones will need to stay above 12990 which is a minor support target to the downside which if sustained may provide an opportunity for the index to once again move past the recent high. But alternatively, failing to hold 12990 may drag the index lower towards 12800.
Crude Oil holds onto the $96.30 level
The slope of the 100 period Moving Average remains to the upside. Also the commodity is still above the resistance target of $96.30 of which both suggest higher prices ahead. On a short term basis given the weakness over the last few trading sessions, Crude Oil may fall a little lower but will need to reverse the negativity very quickly. If this scenario can take place then the commodity may still be on target for the $100 – $106 levels. Failure to sustain the $96.30 by the end of this week may indicate the price of oil has lower to fall before finding support at the $94.00 level.