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CFD: Ideas You Can Trade - WallStreet Inches Above Resistance Line

Posted by Steven Hatzakis on Aug 27, 2014 6:50:00 AM

WallStreet: Yesterday's New High Indicates Possible Resistance Barrier

The short term daily candle chart below shows the price history of WallStreet. This contract for difference (CFD) is trading just around 17,128 around time of publication today.

The WallStreet CFD aims to track the underlying Dow Jones Industrial Average (DJIA) index which had reached a new all-time high yesterday at 17,153.80 inching just barely over the previous high reached in July 2014.

Last time WallStreet was reviewed in the Ideas You Can Trade series, in late July, the index had corrected and reached a low of 16,260. Since then the index rebounded a along a short term trend line that has been guiding the price action towards current levels.

With resistance near 17,152 reached at yesterday's high, a new ceiling around that level could provide a resistive barrier to further upside, whereas if an upside breakout (above 17,153) follows - the bullish momentum should continue. Considering the recent recovery (from 16,260), the uptrend appears to have resumed and the momentum appears bullish, with the only barrier yesterday's high.

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

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 17,165 with a Limit to take profit @ 17,298 and a stop-loss @ 17,045 Risk/Reward Summary: Limit risk = +133 points profit / (-120) Stop-loss risk = Gain to Loss ratio =  1.10

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 17,069 with a Limit to take profit @ 16,960 and a stop-loss @ 17,150 Risk/Reward Summary: Limit risk = +109 points profit / (-81) Stop-loss risk = Gain to Loss Ratio =  1.34

Short term chart (daily candles):

 wallstreetdaily august 27 2014 note

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.

In addition to CFDs, WWM - through a third-party - offers direct access to non-US residents to trade exchange trade equities on the US Stock Markets, with more information also available via the WWM homepage.

Topics: DJIA, US Stock Market, Dow Jones Industrial Average, contract for difference, technical analysis, cfd, Forex, Ideas You Can Trade, Wall Street, WallStreet, Dow Jones

 

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