Tag Archive for 'buying shares'

Don’t get suckered in to this market – the FTSE could be about to change direction

Published on July 27, 2010 in Uncategorized. 0 Comments Tags: , , , , , , , , , , , , , , , , , , , , , , .

Let’s begin by admitting that no analytical system of the Stock Market is perfect and always 100% right. But there are some technical signals that do tend to ‘work’ more often than not and it is, therefore, worth taking note of them as and when they occur and adjusting one’s trading accordingly.

One such technical signal is when the index (or stock price) meets the level of its 30 week moving average (‘MA’); when it does the index, or share price, will often change direction at, or near, the meeting point. If the price has fallen to the MA level then, often, it will turn back upwards; if it has risen to the MA level then, often, it will reverse and fall back.

As you can see from this chart over the last few years the FTSE has changed direction each time it has met with or come close to the level of its 30 wk  moving average and it is at that level again now -

So, it would be wise to take notice of this and to hold fire on any new share purchases or long trades of the FTSE until the picture becomes clearer.

Another point to bear in mind (no pun intended) is that the FTSE is currently in a technical downtrend and within any downtrend there will often be ‘bear’ trend rallies that last for between 3 and 5 weeks. This week is the 4th week of the current rally!

The FTSE – Up or Down? Is it going to Crash?

Published on May 24, 2010 in Market Reviews and ShareHunter News. 0 Comments Tags: , , , , , , , , .

Despite the doom and gloom in the press and all of the dire warnings of Armageddon to come (although there is no denying that is a possibility) all that has happened to the FTSE so far is that it has retraced back to its important support area of 5100/5000. Nothing new in that as it has been there 3 times in the last 3 months and, on each of those occasions, it has found support and rallied.

But this time it could be different, for the following (technical) reasons:

1. This time the FTSE has fallen below the level of its 30wk. moving average – a negative signal indicating a lack of support and

2. This is the 4th occasion that is has sought support at the 5100/5000 area – and historical records show that the 4th occasion at the same level usually results in a break of that level; (not only that but, after a 4th occasion, the following action can be fast and steep).

So, there is the possibility that the FTSE is going to plummet down to the 4747 level and, possibly, then a lot further (down to 3500) but, for the moment, we must wait to see if support is forthcoming because if it is – on this 4th occasion – then the FTSE could rally back up to the 5400 area.This scenario does not make for easy trading; ‘shorts’ look to be the order of the day but would be stopped out if a rally does ensue. ‘Longs’ are perhaps even more dangerous just now as a price rally may be very short lived as there is a real danger of a price collapse.

Of the other markets, the S&P 500 has tumbled back down to its important support level at 1100 and it is displaying signals of weakness so the danger is that it could, soon, take a nose dive down to the 940 level area if support is not forthcoming this week. Much the same dismal picture applies to the DJIA where increasing weakness is suggesting the index might collapse by over 1000 points, down to mthe 8860 area. The Nasdaq 100 is currently resting and testing for support at the level of its 30wk. moving average. If it breaks below this it is likely to slip all the way down to the 1629 level area.

Individual market commentary and illustrative charts are available at http://www.sharehunter.com/news/market-review/