Identifying the Potential of Trends for the Week Ahead (11/16/15)

Alexey Panasenko |

Forex technical analysis helps to answer the questions: How to interpret Forex rates? Buy? Sell? Close a trade? Take profit or let it run for some more time? Will it face reversal or go trhough correction? Accept a loss and “flip over” or wait for some more time? Finally, how to define Forex trend?” All these questions drive a trader (mainly beginning) crazy, if he does not know the answer. By the way, who will dare to claim to know the answer? Forex exchange rates are cruel towards one's self-confidence and arrogant manner. Nevertheless, it is subject to regularities and daily techical analysis. There are plenty of strategies on Forex trend lines. We are not so much interested with the direction of fx rate along major lines (this is interesting too, though) as with the Potential of the Forex trend. The main purpose of our Forex technical analysis report named "Potential of Trend" is to find if current price goes through correction either we face a trend.

S&P500

Monthly chart: as we see, a downward correction (threatening to turn into a full turn) began even before we assumed - the upper Bollinger band (2169.5) remains unfinished. However, we know about the previously broken inside bar, so technically retest of the broken the upper wall can be considered continuation of the events.

Right now there the middle Bollinger band (2008.1) is being touched. If it does not support bullish determination, we'll see a further decline of the index to 1838.8 (the bottom band)

The weekly chart: a little more localized support 1904.8 (the bottom Bollinger band).

 

The daily chart: the two scenarios of decline. The first - a direct breach of the bottom envelope (2008.1) and fall to 1904.8. The second - a rebound from 2008.1 in the area of the middle Bollinger band (2066.4), and only then the main phase of the fall.

 

Expectations:

The main scenario - breakdown of 2008.1 and drop to 1904.8

The alternative scenario - touch of 2008.1 and rebound to 2066.4.

solutions:

1) Sales aimed at breakdown 2008.1 to 1904.8

2) On bounce up from 2008.1 - we sell from the area of 2066.4

 

"Brent"

Monthly chart: oil seems to be doomed. We have an obvious drop which is accelerating. We expect the price on $28.10 per barrel in the medium-term (the bottom Bollinger band) in the coming months.

 

The weekly chart: local support 41.52 (the bottom Bollinger band) can initiate another pullback to 51.96 zone, but will need to purchase on very strong signals, without which buying Brent is crazy.

The daily chart: support 42.57 (the bottom Bollinger Band) looks serious level for scalpers, but ADX exposure leaves almost no chance for a substantial rebound.

Expectations: drop to 41.52 as soon as this week.

solutions:

1) We keep sales for the medium-term to 28.10, within a week we add to 41.52 in our position.

Gold

Monthly chart: support 1064.68 (the bottom Bollinger band) under enormous pressure of bearish ADX. There is a high probability of beginning of the new trend aiming to drop to 1000.0 and below.

The weekly chart: Another local support 1073.45 is likely to be broken. However, probability of rolling back is also possible within the framework of usual workout of similar setups.

The daily chart: Friday was closed by the pinbar, but it is likely to be a bull trap - it looks very bad for the buyers. There is also a probability of rollback to the middle Bollinger band zone (1135.46) due to the strong oversoldness and approaching breakthrough of the bottom envelope.

Expectations:

The main scenario - drop to 1064.68 and then bounce in the direction of 1135.46

The alternative scenario - breakthrough of zone 1064.68 and forcing to get new Lows.

solutions:

1) Sales to 1064.68

2) If we have strong signals of correction in the area of 1064.68 - we can try to buy in the direction of 1135.46.

 
 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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