Monday

Magik Edition 6

MAGIK Numbers

Daily and Weekly Dow Jones | FTSE Analysis

By Mr. Magik

2 Feb 2009 | Edition 6

Dow

Covered long at 8220 (Fridays Pivot) for a small lost 10 points. Reopened long at 8090 and stopped out at 8050. The Dow closed at 8000 on Friday which was a further pullback. We are expecting the Dow to trade within a range of 8142 (daily R1) and 7920 (daily S1). Swing is oversold at 16% hence we are expecting a bounce to at least pivot today 8055. We expect daily R1 8142 to provide resistance, and is fair to short here. I expect S1 7920 to break today as it was the recent low and has been tested 4 times hence I expect it to break as weaker bulls sell or cut loss. The key overlap point is at 7800 which should be the next area if strong support, this level is expected to provide very strong support today. The uptrend is broken, at best is a consolidation over this week. Despite the expected strong support at 7800 level, tight stops must be maintained on all long positions.

Trade plan

Futures have already broken S1, look to turn long at daily S2 7800 with a target of Pivot 8055, stop is 7700. Sell at daily R1 8142, stop 8210 ( Friday high). 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 4149 in a neutral position on Friday. I expect FTSE to be under pressure today and would most likely try to touch daily S1 4106. The expected trade range is between 4213 (DR1) and 4106 (DS1). FTSE has also turned down trending, this will be very bearish if we continue to make new lows today.

Trade plan

- No trade taken. For risk takers you can take a long position from daily S1 4106 however because it was not oversold on Friday and there is no support until daily S2 4055 and weekly S1 is much lower at 4019 hence a prudent risk management trade is to only buy between daily S2 and weekly S1 4055 – 4019. Stop is 3990.

Best to your trade,

Mr.Magik