Friday

Magik Numbers Edition 5

1 Comment January 30, 2009 – 10:52 am |   | Permalink |  Print This Post |

MAGIK Numbers

Daily and Weekly Dow Jones | FTSE Analysis

By Mr. Magik

30 Jan 2009 | Edition 5

Dow

Trade taken at daily BS and should still be long at 8235 from Thursday. The Dow closed at 8149 on Thursday which was a big pullback. We are expecting the Dow to trade within a range of 8300 (daily R1) and 8070 (daily S1). Swing is very oversold at 15% hence we are expecting a bounce to at least pivot today. We expect daily R1 8300 to provide strong resistance, the pivot 8229 today (our entry point for yesterday) can also act as a minor resistance point. There are 2 key overlap points between daily R1 and weekly R2 at 8280- 8300, this level is expected to provide very strong resistance. Also overlap support is Daily S1 and weekly pivot being 8092 – 8070. All will be determined by the 4^th quarter GDP figures today. The uptrend is still barely intact so a break to lower lows can be very bad. Despite the expected strong support at 8070 level, tight stops must be maintained on all long positions.

Trade plan

– Look to cover long position from 8235 yesterday at todays pivot.

Look to turn long again at daily S1 8090 with a target of R1 8300, stop is 8050. Sell at daily R1 8300. 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 4193 in a oversold position on Thursday. FTSE retraced all of its gains from Wednesday and even made a lower low. FTSE essentially led the crash yesterday having been down over 2% before Dow broke lower, this observation was critical in giving us some insight that all was not right when dow briefly touched 8300. I expect FTSE to be under pressure today and would most likely try to touch daily pivot 4208 and then meet weekly R1 4217. This area now acts as a resistance for today.  The expected trade range is between 4269 (DR1) and 4130 (DS1).

Trade plan

- No trade taken. Look to buy at S1 4130 due to oversold % with a stop at  4080 (expect to hold for next week to profit). Target 4217 Weekly R1 – Alternatively sell at Daily R1 4268 with target at S1 4130, stop is 4318. GDP will influence market movement today. Best risk manage accordingly.

Best to your trade,

Mr.Magik

If you have an informed opinion on investing that you want to share with The Inflationist community, we welcome you to register as an author. The best way to contribute to The Inflationist is to sign up for “The Inflationist Challenge 2009″ and to manage your own virtual portfolio. That way, your portfolio performance speaks for the quality of your articles (price action is all we care about really). The Inflationist strives to provide objective, transparent stock recommendations leveraging on public investing talent.