Spread Betting Markets Move Higher But for How Long?

Posted on | August 10, 2010 |

With positive momentum continuing to lift the indices higher, the need to sustain support levels is becoming more important for the bulls.

Technical indicators remain bullish but chart patterns may be telling a different story.

As we approach key resistance levels the markets are now getting to a decision point on price, pattern and time. What lies for the weeks ahead?

FTSE 100 approaches the 5435 level

With the FTSE 100 holding 5215 – 5170 support level in last week’s trading, the stage appears to now be set for to tackle 5435 resistance level. The index maintained its stance above the 20 period Moving Average.

However even with a positive close on the week’s trading session we note that the momentum index has only had a minor uptick. More importantly the move up is now counting 5 waves which typically appears before a correction. The index will need to hold 5245 to possibly reach for 5610 in the coming weeks.

Dow Jones holding key 10630 level

The spread betting bulls managed to hold a week of volatile price action as the bearish attempt to take prices lower failed. Sustaining the 10200 support level and more importantly holding 10594 the index is looking to clear 10630.

Also sporting a 5 wave advance in the current move and a flat momentum line may suggest the move up may be approaching exhaustion. The bulls must hold 10395 and clear 10630 to tackle 10800 – 10900.

Crude Oil breaks above $80 after 3 months

Elsewhere in the financial spread betting markets, the September Nymex Crude Oil contract held $75.00 to lift the contract higher after a 3 month battle for higher prices. Now that the commodity has managed a break of $80.00 will we see the $100 level?

The stochastic indicator is clearly flat lining at its upper level. A pullback to $78 may be healthy and create a base for Oil to head higher towards $85 - $90 over the next few weeks.

The $100 mark may prove to be a tough obstacle for the short term. However, as long as the commodity stays above the $80 channel we cannot negate the chance of significantly higher prices.

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.

Comments