12/05/2008

Futures analysis

The symmetrical triangle pattern has expanded a little bit (former daily lower high no longer serves as a reference point for triangle's upper band, so I had to adjust it), but still remains unviolated despite recent rally. As long as the price remains in current series of higher lows, the odds for a sustained breakout above the triangle are constantly increasing. Current technical alignment indicates, that price level, which violates the triangle will be 3075 from now on, as it is the most significant long term support/resistance area (also corresponding with declining 100-day moving average). Now it is only a matter of days to retest, so if you want to get involved, you should probably trade in the lowest timeframes, as the price fluctuates within just 40 points below the resistance. But, as for the daily timeframe, we must wait now for a confirmation, in order to judge any further market action.

We can see on intraday chart, that 2970-90 area is still acting as a significant pivotal area here in WIG20 futures. It was penetrated yet again on Thursday and Friday and has remained defended since then. The market gapped up in the morning and found support at previous intraday level - 3015, which is Wednesday's swing low and Thursday's swing high. American stock market posted a solid uptrend today, but then again - showed intraday reversal just minutes before the close. Today's announcements showed, that retailers' earnings have surged recently, but now that tomorrow's macroeconomical data covers overall retail sales, it all could be already discounted by the price. What I am expecting here is that uptrend in the States might cause another morning upside gap here in WIG20 futures, but possibly with not enough strength to break through important levels. Late day reversals are usually continued (as in the case of the U.S.) and let this be my market sentiment catalyst for tomorrow. Shortly speaking, I am expecting upside action in the morning, but also trying to anticipate short term tops and reversals at any encountered resistance levels. Unless better-than-estimated macro data will cause yet more euphorical buying, I look forward to see a trend change to downside late in the day tomorrow.