CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

January rally could lift markets higher in the short term

Article By: ,  Financial Analyst
January 2, 2013 10:39 AM

The January effect, where stock markets could move higher for the first five trading days, may provide Bullish momentum at the start of this New Year. So far the markets have held above support levels and continue to show strength which is indicating that more upside is likely heading into the end of this week but traders should be aware of the support levels which will need to be respected if the Bulls are going to remain in control. The UK market seems to show more strength compared to the US, which is a Divergence that may cause concern over the coming weeks. See key levels below:

FTSE 100 targeting 6150 level
Last year closed on a positive note and the UK FTSE 100 index has managed to hold firmly above the 5900 resistance level which has now become support. The index continues to enjoy its bullish momentum which started in November and this looks set to continue as long as the resistance targets are cleared. Over the next few weeks the FTSE 100 will need to hold 5900 but if a pullback occurs we may see 5835 being tested. As long as we do not see a change in momentum this should not be a major concern. From a pattern perspective we see the classic higher highs and higher lows supporting a Bullish case for January – February.


Dow Jones reaches 12900 support
As expected the US Dow Jones index reached and has held support level at 12900. As long as we see this level holding, the cushion may provide an opportunity to launch a move towards the 13338 level. This has already proved to be a barrier during December and once surpassed the index may seek to reach 13550 over the coming weeks. However, the Dow Jones has not turned Bullish from a momentum basis and this may hold back the index unless we see a sharp thrust over the next few days. Failing this scenario could place the Dow Jones back into a weak state and drag the index lower below 12900.

 


Crude Oil reaching for $100.00
December saw Crude Oil hold above key support at $89.00 and has so far shown signs of strength for this commodity. If Oil continues higher in January then the $100.00 level may be cleared, paving the way for $125.00 per barrel by the first half of this year. But the push higher may not be a smooth ride and Crude Oil will likely face hurdles along the way. An alternative scenario may arise where we see a range bound environment ranging from $90.00 – $100.00 before a breakout occurs. Currently Oil has turned Bullish on a momentum basis and next week will provide further clue.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024