27/02/2008

Futures analysis

Today's session posted another black candle in the daily timeframe, that exceeded yesterday's close. Another session confirms failure of the pennant pattern and indicates possible next major downside move. The nearest daily price target is now 2860, as the last significant support level of 3030 was broken today. Today's session also included higher trading activity, which was caused by weak macroeconomical data, announced in the States. American economy is constantly slowing down and declining Dollar drives commodity prices upwards again (hedge against inflation).

The futures gapped up on the open as a result of a positive close of american stock market. As you can see on the intraday chart, price opened almost exactly at the lower band of the pennant formation and found resistance there. The market gained much momentum and posted a symmetrical triangle consolidation before breaking through 3025. The whole decline finished at prior resistance level from 11th of February and found support there. If there is no overnight gap, the nearest resistance area for the futures is naturally 3025-30 area, which is where you should watch for reversal bars or patterns, when planning a short position entry here. If 2990 is broken, then the next level of support will be 2950.