Greater London, England -- (SBWire) -- 01/19/2011 -- Sandy Jadeja, financial spread betting expert and Chief Technical Analyst at City Index (http://www.cityindex.co.uk/), turns his attentions to the week ahead on 17th January, with particular focus on the FTSE 100, Dow Jones and February Gold.
"An interesting session with Friday seeing a mixed bag of trading across various indices leaves doubt for this week ahead. The US markets traded higher but the UK FTSE 100 saw the index close lower. It appears that the UK market may already have made a short term top whilst the US was lagging. This week certainly looks interesting from a pattern perspective as Extensions across the board suggest that short term exhaustion may help set the stage for the Bears to come out to play. If true then a -6% decline could be on the cards and volatility could pick up creating ample opportunities.
FTSE 100 stuck at 6050 – 6117 barrier …
The FTSE 100 broke below 5970 in last week’s trading suggesting that 6090 could be a Key point for the moment. The Bulls will need to lift the index higher above 6090 to target 6250 as the next price objective. However a further break below 5950 could see the index trade lower to at least 5872 and possibly lower towards 5737 – 5707 if weakness starts to set in. Currently the index is now testing its 20 Day Moving Average which may support the index but momentum is clearly showing signs of weakness suggesting bearish moves are likely.
Dow Jones trades above Resistance line…
With the 11705 target being reached and cleared the US Dow Jones Index reached a high of 11794. Traders will need to keep a close eye on this week’s closing price. If we see a negative close to the week then the stage could be setting up for a bearish move ahead. 11670 is a key pivot level which a break below may see the Dow target 11463 and also see the index get back below the 20 MA. With this in mind a pullback is looking very likely over the next week or two and a move above 11794 is required to negate the short term bearish outlook.
February Gold needs to clear $1392 ...
Having traded below the $1400 level; February Gold is setting its eyes on $1329 - $1297 as Support. For a Bullish move the metal really needs to clear above $1392 in order to target the important $1500 target. However as noted the bearish Parabolic break is still in play and overall a sideways channel pattern is developing. Long term a break above or below the channel is likely to dictate the midterm view. For now though the commodity is looking choppy and traders may find that until a clear direction has been set there could be a range bound week ahead for Feb Gold.”
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