Daily technical analysis of key indices, forex and commodities spread betting markets. The spread betting technical analysis looks at ranges, Stochastics, RSI, bullish/bearish trends and possible market moves.
For the latest daily technical analysis for a particular market please see:
A quick look at the latest analysis for the Dow Jones:
17 May 2013 update -
The Dow Jones spread betting index closed lower on Thursday and the low-range close sets the stage for a steady-to-lower opening on Friday. Stochastics and the RSI are turning neutral-to-bearish signalling that a short-term top might be in or is near. Closes below the reaction low crossing are needed to confirm that a short-term top has been posted. If it extends the rally off November's low into uncharted territory, upside targets will be hard to project.
For more updates, simply choose the relevant market listed above.
Technical Analysis - Spread Betting Charts
To help with technical analysis, spread betting firms like Financial Spreads give clients access to charts.
Many charts let you review historic data in different views and timeframes, eg:
- Candlesticks, Bar, Line and Area.
- Timeframes: you can set the timeframe to be in 1, 2, 3, 5, 10, 15 & 30 minute intervals, 1, 2 & 4 hour intervals as well as 1 day, 1 week and 1 month intervals.
Firms like Financial Spreads also offer some of the more advanced charting features such as
- Free 'Back Testing' tools
- Free price alerts
- Drawing features for Fibonacci time-zones, fans and arcs
Technical Analysis Charts
The following spread betting companies provide clients with access to charts.
Charting may also be available with other companies - notes.
Technical Analysis Indicators
Technical Analysis - Trend Indicators
You might have heard the term ‘trade with the trend’ in relation to trading. Those who use trend indicators believe the market has certain up and down trends which can be used to predict future prices.
One of the simplest technical indicators is the moving average. Many traders use 14 day or 28 day moving averages on which to base their trading decisions. They believe that if the price starts trading above average, chances are it will continue to do so for some time and vice versa. If it should drop below average it will most likely continue to drop for a while.
Technical Analysis - Momentum Indicators
This type of indicator aims to pick up when the market gains or loses momentum. They are often oscillating indicators, showing when the market is oversold or overbought. Examples include Stochastic Indicators and the RSI.
Technical Analysis - Volatility Indicators
Volatility indicators pick up changes in market volatility. This can, for example, be a sudden change in the average movement of the price during a specific time period. Examples include Bollinger Bands and the ATR (Average True Range).
Technical Analysis - Volume Indicators
Volume indicators react to a sudden change in market volumes. If a price breakout is combined with high volumes, this is, for example, seen as a very bullish signal. Examples of volume indicators include the OBV and the Demand Index.
What is Technical Analysis?
You will find that there are a large number of variables that could determine the current price of a given market. Ultimately it depends on how much money investors are inclined to buy/sell it at.
Whether or not a specific commodities market, share or forex rate moves lower or higher will often depend upon the market's sentiment towards an industry or company.
This suggests that if market optimism decreases, prices can dip. Then again, of course, growing confidence can often turn into rising price levels. Note that with derivates products like spread betting an investor can speculate on a market to drop.
Many speculators decide to use a blend of fundamental analysis and technical analysis when evaluating the markets.
A trader using solely technical analysis bases their viewpoint on indentifying price trends in historic data and as a result candlestick charts are normally very helpful.
Considering the fact that a number of candlestick charts enable you to examine market movements covering 30, 10, 5 and even 1 minute intervals then technical analysis often attracts short term traders and day traders.
The basic principle of technical analysis is that all the details about a given market are already built into any price trends.
As a consequence, there's no requirement to cover the current financial news and market information etc due to the fact any such elements are, in theory, reflected in the current market level.
Then again, whilst this can be a fast and useful analysis, the principal drawback is the fact that this type of analysis is based solely on historic data. Just because a given share has been falling, that does not guarantee that it will continue to fall.
With financial spread betting you can lose more than your original stake or investment. Spread betting carries a high level of risk to your capital. Please familiarise yourself with the risks that are involved and before trading, ensure that financial spread betting matches your investment objectives. Seek independent advice where necessary.
Technical Analysis - edited by MJ, 17 May 2013.
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