Stock Markets Poised for Further Upward Movement

After the recent decline in the global stock markets and then a quick reversal it appears that the markets are to looking to continue their upwards charge as momentum gathers pace.

During the more recent dip, the key stock markets indices reached the technical targets as expected and found price support at intermediate levels. The price reversal has shown strength on a number of technical fronts and that points to further upwards movement if positive momentum continues in the short-term.

A good example of this is the UK’s FTSE 100. After reaching price support at 5105, with a low at 5080, the FTSE 100 index has managed to gain over 7%. Currently the index is at a price resistance level of 5435. Naturally the markets will need to sustain this level if higher prices are in store. Note that City Index are suggesting that, “5510 is the next price target with key resistance around the 5610-5630 area”.

“For short term day trading, the index must stay above 5340 otherwise we could well see a price a retracement towards the 5300 – 5270 range. Importantly the index has registered a Bullish reversal supporting higher moves for the very short term”. If you are trading futures through Contracts for Difference, or directly through a broker, be aware that the monthly charts remain Bearish.

Whilst the latest increases sound very positive, note that Simon Denham of Financial Spreads recently commented, “Whatever your view of the stock markets in 2010, so far the main US and UK indices have been virtually flat for the year”. It could be worse, Japan’s exporters continue to struggle with the strong Yen and the Japanese Nikkei 225 is down 12% for the year.