WallStreet: Prior High of March 2nd Under 18300 Should be Next Upside Target If Bullish Momentum Holds
The daily candle chart below shows the short term price history of WallStreet - a contract for difference (CFD) which aims to track the underlying Dow Jones Industrial Average (DJIA) index. Today WallStreet is trading near 18194 around time of publication - and near fresh session highs - as the end of the trading week is barely an hour away.
Last time WallStreet was reviewed in Ideas You Can Trade on March 12th, a bounce had occurred on a bullish support line after a pullback in the index had brought it lower, and a reversal from that bullish line was expected.
Since then WallStreet has indeed recovered and hit the upside target of 18000 this Wednesday - which it has since surpassed as it moved towards current levels.
With the uncertainty growing over the US Federal Reserve policy over its interest rate decision in coming months and as explained by WorldWideMarket's Joseph Trevisani on CNBC today, WallStreet is pushing back towards its most recent high under 18,300 -which should be the next upside target.
If resistance however is encountered under that previous high -then a sharp reversal could follow - whereas from current levels a pullback could pivot on the upper line of the bullish channel near the bottom of yesterday's low (near 18,000).
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 18201 with a Limit to take profit @ 18320 and a stop-loss @ 18101 Risk/Reward Summary: Limit risk = +119 points profit / (-100) Stop-loss risk = Gain to Loss ratio = 1.19
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 17964 with a Limit to take profit @ 17768 and a stop-loss @ 18092 Risk/Reward Summary: Limit risk = +196 points profit / (-128) Stop-loss risk = Gain to Loss Ratio = 1.53
Short term chart (daily candles):