Greater London, England -- (SBWire) -- 10/27/2010 -- Sandy Jadeja, Technical Analyst at City Index (http://www.cityindex.co.uk) commented:
Possible intermediate reversal for stock indices…
The week ending Oct 15th pointed to a key reversal based on “Time Analysis.” With the current setup in terms of Price, Pattern and Time we could be at a “possible” intermediate term trend reversal. The crucial element is if the markets close lower than its opening price by the close of Friday 22nd October then this could confirm that a high could be in place and the bears may be taking control for the next few weeks. Technical indicators are starting to wane also suggesting price exhaustion is looking likely at current technical resistance levels.
FTSE 100 flirting with 5706 level …
If the FTSE 100 has completed an ABCD pattern at the 5706 level then we could witness a push lower into this week’s trading. In order to confirm this we would need to see a break of 5660 and preferably a close below the 20 day moving average indicator. The RSI indicator has not made new highs in line with price. This divergence may suggest that a decline is more likely rather than a rally. For higher prices the 5770 needs to be cleared to target 5815 – 5833 where a “Double Top” pattern could be in sight.
Dow Jones looking tired at 11060…
Although the Dow Jones closed lower in Friday’s trading session we note that the index is still above its Parabolic SAR Curve. A conflict between the RSI and price is indicating that we would need to see a clear break below 11000 for the bearish move towards10403 to take place. If we see a close above 11167 then this clearly suggests further upside possibilities for the index to reach 11250. October has historically proved to be bearish for stock indices and surprises may be to the downside if we start to see weakness at current levels.
December reaches $1380 target...
A continuation to the upside takes Gold right into our target of $1380. But the last three days has created a “Pivot” which requires gold to stay above $1350 for the bullish trend to continue for higher prices. Similar to stock indices technical indicators are starting to look overstretched and sharp pullbacks may be at hand. A pullback would be healthy at this stage to relieve the overbought condition. Support comes in at $1246 for further trend continuations and if Gold breaks above $1400 this week then the all important $1500 level may be likely for the coming weeks ahead.
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Spread Betting Technical Analysis: Possible Intermediate Reversal for Stock Indices
The spread betting experts at City Index have a knowledge of the financial markets that will add an edge to your trading. Here, Chief Technical Analyst Sandy Jadeja gives his ‘Week Ahead’ Report on FTSE 100, Dow Jones and December Gold for October 18th.