Dow Jones Election Rally Heading into Resistance

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November 7, 2012 by Sandy Jadeja

 

Now that we have the US elections out of the way the markets have reacted with a positive tone prior to the outcome. But the real test is to see if the rally will hold or fade out. Although it is difficult to say how investors feel about the outcome the charts are suggesting that we may see a significant move soon. The reasoning is that up until the elections we have seen a consolidation pattern develop and a breakout is required to resolve the indecisive phase. With breakouts the moves can be swift and volatile in some cases. Once the breakout occurs there could be a trend continuation or a trend reversal at hand. See key levels below:

FTSE 100 back at 5900 again
Taking a lead from the US markets the FTSE 100 has managed to remain above 5830 again and is testing the 5900 resistance level. The last two attempts to break past the 5900 level resulted in the index falling lower. If it manages to clear this level then the route towards 6000-6150 may transpire. The momentum trend has remained positive, which indicates that the index does still have fuel to move higher. But caution is required if the FTSE 100 closes below 5830 and if the current move fails to sustain bullish momentum. The downside is that we could see a triple top formation which could create a bearish pattern resulting in a reversal.

 

Tuesday’s rally which has helped lift the Dow Jones index away from 13060 may provide an opportunity for the bulls to take the index higher. It will need to move above 13338 in order to prove that the rally will not fizzle out. Above 13338 we still have the 13550 level which needs to be overcome. The negative aspect is that the momentum has been bearish and until a bullish thrust has developed, traders may seek to sell into potential rallies. We may see selling pressure develop by the end of this week unless the index moves past the resistance levels. A clear breakout is required to indicate the next key move.

Gold rallies at support
The support level has held for gold and also created a potential bullish scenario if we see the metal close on its highs by Friday. As the bullish momentum is still intact, the metal may reach for $1,775 where we saw the recent reversal. The price of gold may then move upwards to see $1,840, which becomes the focal point if current support levels are sustained. Failure to hold support may turn gold onto a bearish situation for the short term and bring the commodity down towards $1,550 if the bullish move does not work out. The next few days will need to hold onto positive momentum to avoid the decline.

 

By the way, Sandy, Chief Technical Analyst of City Index is in Singapore to give the below seminars at City Index Singapore, please email or sms Rebecca at info@cityindexasia.com or 8189 2318 with your name, contact number and email to register if you want to know more about the market outlook after Obama won the US Presidential Election 2012, and also the trading strategies.
 
 
Date: 19th Nov 2012 (Monday) or 28th Nov 2012 (Wednesday)
Time: 7:00PM to 9:00PM
Venue: City Index Asia Pte Ltd 6 Battery Road #20-01 Singapore 049909 (At Raffles Place Station Exit H) 

 
 

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A Guide To Stock Trading System

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Guest Post

A great way to help you get started in buying and selling on the markets is to use a Stock trading system. You can obtain this by using a free download or by paying to use a more advanced system. The clever software can help you make educated moves on the markets as they use trend predictions. There are many available products and here are a few tips to help you select a good one.

Make sure that you make use of the Internet to find out all about a program. Do not simply read the website pages, search on forums for client reactions. And it pays to find out all about how the markets and systems operate. The Internet has lots of free tutorials to read or watch.

Most of this is available for free without having to sign up for anything. Take time to get a good understanding on all the details before you begin to trade. This is a risky way to make money, especially if you are uninformed. If a system provider tells you that they will guarantee to make you money then walk away as there is always a risk involved. When you look at the package you are interested in make sure it comes with plenty of tools and information. Having updates on the current market trends in the forms of graphs can be a great way to help you learn how the system operates.

Check that the customer service is excellent and provides various ways to get in touch with an advisor. Contact them through one of the methods which can help you get a good feel for a company. The best ones will allow you to contact them through online chatting as well as through their twenty four hour manned telephone lines.

A great way to help you progress from being interested to giving the markets a go is by taking full advantage of the free account trial. You are able to try out the system in advance by using the practice account. These let you play with virtual money and see how your skills at buying and selling perform on the live markets.

They are a great way of testing the water without any risk. You can learn as you practice which can give you a good idea of how the system works. You should not rely solely on the software, and take time to learn how the trends may be affected by current affairs.

Do not simply let your account run itself. By doing this you risk signing in to find all of your money has been lost. Keep a close eye on how it is performing and alter your account to help reduce the risk of losing everything.

Be sure to fill in the amounts you want to buy at and sell at. Updates are useful to help you make the changes you need so pay attention to any information you are sent. Remember as with all stock trading there is always a risk involved.

Learn about the advantages and benefits of using an effective stock trading system to build a thriving portfolio. When you want to get the details about successful stock trading techniques, you can find them now!

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Differentiating Value Investing From Momentum Investing

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Guest Post

Stock investing is a risky venture. It all depends on a lot of uncertain factors such as time, the trend in business, and demands of consumers. For this reason, investing in stocks is taken by many as a difficult venture to get into but it can give huge rewards as long as the investor understand the basics and most especially, he knows what strategy will work best in getting bigger gains from his stock investments. Among the most common strategies that investors use in trading stocks in the market is the value investing and momentum investing. Although both of them can be helpful in gaining more from stocks, both of them should be used in the right circumstances to get the desired results.

Value Investing

In value investing, investors choose the stocks which are cheaper at the time of their purchase compared to how much it will be valued in the near future. Investors who live by this strategy hopes that the worth of the stocks that they purchased will eventually increase due to some factors such as other investors taking advantage of its cheap price which will make its value higher due to the increase in its demand, or a sudden boom in the industry where the issuer of the stocks belongs to. An investor can spot a good bargain by looking into a certain factors. He should know examine certain measurement units such as the price/book value, P/E ratio and the dividend yield. It will also be helpful for the investor to know how to examine the company’s potential in the market, whether it is expected to succeed in the near future or, it will stay in its low state for a long period of time or worse, will end up worthless. Value investing is considered as a low-risk trading strategy so for those who are new to the stock market, this is an ideal strategy that they can start with although it takes a lot of research to know the real value of the stocks by having a timely update on the investing sites and financial news, to know if the company issuing the stocks is on its way to growth.

Momentum Investing

Momentum investors are those who take advantage of the issuing company’s continuous and rapid growth, faster than how the industry it belongs to is faring. Unlike with the value investors who buy stocks while they are at a low price with the hope of increasing its value in time, momentum investors buy stocks that are already highly priced but are still expected to increase in value because of its increasing success. Momentum investors also look at average companies who are doing great in the industry. Momentum investors face higher risk especially in circumstances when an issuing company may have already reached its peak. Momentum investors may gain profits in the short term basis but they face higher risk than value investors.

Final Words

Investing in stocks have risks and it is important for an investor to know which strategy works best. But whatever strategy he chooses, an investor has to make a lot of research and be updated with the latest news in the financial and business sector to know the trends in the value of the stocks.

Fortunately, with the availability of different kinds of high speed internet, people can get updates regardless of their location. Broadband Expert provides information about the leading broadband providers and makes comparisons so people can have an informed decision in getting the right provider that will suit their internet connection needs.

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