WallStreet: Support Near 15,340 for Third Day Much Needed to Avoid Continuation
The short term daily candle chart below shows the price of the WallStreet contract for difference (CFD) last trading today near 15,432 following the market close of this CFD's underlying index, for today's session.
WallStreet has experienced a pullback over the last two weeks that eventually found support in the last three sessions (including today) near 13,340, a level that seems to have been intersected by a previous trend lines trajectory - extending it from the past into the current level (red line with dotted continuation on chart).
Last time this CFD was covered in the Ideas You Can Trade series, the pullback had already started and had looked for support, and since then moved lower to current levels.
Two further daily charts are provided below for comparison to the previous article, including an additional long term weekly chart included for the perspective since 2010.
Unless the support found near 15,340 holds, and a bounce near current levels follows, a lower-low may be follow until stronger support is found for a more sustainable reversal or recovery to the highs of early January.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 15,501 with a Limit to take profit @ 15,775 and a stop-loss @ 15,349 Risk/Reward Summary: Limit risk = +274 points profit / (-152) Stop-loss risk = Gain to Loss ratio = 1.80
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 13,298 with a Limit to take profit @ 13,150 and a stop-loss @ 13398 Risk/Reward Summary: Limit risk = +148 points profit / (-100) Stop-loss risk = Gain to Loss Ratio = 1.48
Short term chart (daily candles) using prior trend lines and new lines:
Short term chart with fresh look (daily candles):
Longer Term Weekly Candles:
A note on CFD’s: A Contract for Difference, or CFD,is a financial contract allowing traders to potentially profit whether markets move up or down and include risk of loss. CFDs are cash-settled based on the difference in the value of an underlying asset from the time a trade is opened to the time the position is closed. A list of available CFDs that can be traded with WorldWideMarkets.com (WWM) can be found on the WWM website.