Monday

MaGiK - Edition 11

MAGIK Numbers

Daily and Weekly Dow Jones | FTSE Analysis

By Mr. Magik

9 Feb 2009 | Edition 11

Dow

The Dow closed at 8281 on Friday. We are expecting the Dow to trade within a range of 8375 (daily R1) and 8120 (daily S1). Swing is overbought at 94% hence we are expecting a pullback to close to pivot today 8214. We expect daily pivot 8214 to provide minor support, as the swing indicator shows the Dow trying to get out of consolidation. The daily S1 and weekly pivot will act together to support the market today, I don’t expect the DS1 to break and would make a good opportunity to turn long. A major key overlap point at 8000 today, we expect 8000 to be strong support for the week.

Trade plan

No favourable risk reward trade noted, best remain sideline. The risk rewards for selling at daily Pivot is not good as the target is DS1 and stop is DR1. If any trade is to be taken it has to be short at DR1 and stop above WR1 8440. Target 8214
FTSE

The FTSE closed at 4292 in an overbought position on Friday. The expected trade range is between 4345 (DR1) and 4240 (DS1). The FTSE remains very bullish and quick to rise on any positive Dow movements. A 1% rise in Dow can be a 2% rise n FTSE of late. This maybe due to forex translation on valuations being cheap for FTSE.

As for our trade plan, we remain vigilant of developments in the US senate but also careful of big breaking news.

Trade plan

No favourable risk reward noted as shorting at DR1 is also a breakout of the current range. Hence for risk takers turn short at today’s DR1 4340, target is 4240 stop is 4415. Best sell at 4400 (WR1), stop 4415, target is 4240.

Best to your trade,

Mr.Magik