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CFD: Ideas You Can Trade- UK100 Recovery Resumed

Posted by Steven Hatzakis on Aug 18, 2014 3:46:00 AM

UK100:   Bullish Momentum Regained After August 8th Low

The short term daily candle chart below shows the price history of the UK100 contract for difference (CFD) trading near 6,730.8 around time of publication today.

The CFD aims to track the underlying FTSE100 index which was last reviewed in the Ideas You Can Trade series when a recovery from the August 8th low appeared to be fading. That expectation was inaccurate as UK100 has since gained even more momentum and continuing to push higher towards current prices.

The trend overall appears to be within a widening bearish channel in the context of a larger bullish channel, as seen in the chart below.

The next target if the bullish recovery continues should be near the 6,800.0 level, whereas a pullback in this uptrend could see 6,650.0 before pivoting to move higher.

Below are examples of how to trade a bullish continuation or a bearish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 6,6745.0 with a Limit to take profit @ 6,795.0 and a stop-loss @ 6,6705.0 Risk/Reward Summary: Limit risk = +50.0 points profit / (-40.0) Stop-loss risk = Gain to Loss ratio = 1.25

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 6,648.0 with a Limit to take profit @ 6,601.00 and a stop-loss @ 6,681.0 Risk/Reward Summary: Limit risk = +47.0 points profit / (-33.0) Stop-loss risk = Gain to Loss Ratio = 1.42

 

Medium Term Daily Candle Chart:

uk100daily august 18 2014 note

Topics: CFD trading, LSE, London Stock Exchange, FTSE100, UK100, contract for difference, technical analysis, cfd, FTSE, FTSE 100, UK 100

 

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