Thursday

Magik Numbers: Edition 4

MAGIK Numbers

Daily and Weekly Dow Jones | FTSE Analysis  

By Mr. Magik

29 Jan 2009 | Edition 4 

 
Dow

Trade taken at R1 and stopped out for loss of 35 points. The Dow closed at 8376 on Wednesday which was a strong rally. We are expecting the Dow to trade within a range of 8460 (daily R1) and 8230 (daily S1). Swing is overbought at 95% hence on a daily basis the market is currently on an uptrend due to 2 subsequent days of overbought indicator. We expect daily S1 8230 to provide strong support, the pivot 8315 is weak support today due to the overbought position yesterday. We expect a pullback before attempting new highs. There is a key overlap points between daily R1 and weekly R2 at 8460, this level is expected to provide very strong resistance.  

Trade plan

– Sell at 8460 daily R1 and target daily S1 8230 – stop is 8500. Look to turn long again at daily S1 8230 with a target of R1 8460, stop is 8130. Trades will be dictated by the first price movement, hence buy if it retraces and sell if it does the high first. 

FTSE

The FTSE closed at 4295 in a overbought position on Wednesday. The expected trade range is between 4338 (R1) and 4230 (S1). FTSE is at the top of its range and is expected to meet resistance.  

Trade plan

- Look to sell at Pivot 4276 due to overbought % with a stop at  4318 (ystday high). Target 4230 daily S1 – (Not a particularly good risk reward ratio 1:1). Alternatively Buy at S1 4230 with target at R1 4338, stop is 4217 – this should only be taken if short trade had been taken as we do not want to fight the tape on the way down. 

Best to your trade,

Mr.Magik