FTSE 100 Spread Betting Market Hits Key Resistance Level

Posted on | April 20, 2011 | No Comments

Stock Indices Under Pressure Below Key Levels

Last week’s price action coupled with reversal patterns places the stock indices in a weak position for this week.

Both the FTSE 100 and Dow Jones faced a wall of resistance giving the bears a chance to take these markets lower.

The real question is if the current levels are going to be a short term barrier or instead turn into an intermediate term resistance area. If the answer is the latter, there would be further pressure on the bulls to take these markets higher.

Oil prices fell sharply but still remain above a key support level. If the May contract maintains its bullish stance then higher prices are still possible.

FTSE 100 Stalling at 6050 Resistance

The UK’s FTSE 100 index lost 1% whilst struggling to break above the key level of 6050-6117. This resistance band has been holding the index back for several weeks now. Although technically the FTSE 100 spread betting market has now reached the 20 day Moving Average momentum studies are also trading sideways.

Both indications suggest a pullback towards the 5850 level may be likely if the index does not clear above 6050 this week. The 6000 level is the main divider line and the week ahead should provide a clue to the intermediate trend once the market has decided which side to play with.

Dow Jones Continues Consolidations

Although the Dow Jones has traded sideways for the last two weeks it is still the momentum indicator which may provide a clue for the near term direction. We notice that the indicator is under the recent high and the index is trading below the 12333 level.

The current pattern may be sporting a “Double Top” if the index fails to clear 12333 very soon. Downside objectives are coming in at 12090 if weakness continues to drag the Dow Jones Lower. Unless a clean breakout above 12333 takes place then this index may prove to be much weaker than expected.

Crude Oil pulls back at the key $115 level. Still trading above $97 Nymex Crude Oil pulled back with a loss of 2.78% and creating a Pivot Low at $105.31 – If this low is violated this week then oil prices may create an ABCD pattern at the $101 level.

However, the intermediate term charts still suggest that Oil price could continue to trade towards the upside and a bullish advantage would be to stay above the 20 day Moving Average whilst maintaining a rising momentum indicator. A failure at $115 could see oil start a consolidation between $115 – 101 for the month of April.

Please remember that Spread Betting and CFD Trading are leveraged products that carry a high level of risk to your capital and can result in losses that could quickly exceed your initial outlay. These products may not be suitable for everyone, so please make sure you fully understand the risks involved.

Spread Betting and CFD comments by Sandy Jadeja, Chief Technical Analyst, City Index.

The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.

Neither City Index not Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.

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