Monday, October 22, 2012

Long-term Forecast on Direct Line Group

The fact that Direct Line Insurance Group (LSE:DLG) shares are potentially favorable to buyers should not be downplayed. The technical reasons for this assumption are trotted out in this article. Even when there are brief corrections, the price would go as analyzed, as bears and bulls continue their normal activities.

Technical Forecast
Based on the chart below (which shows 60-minute candles for a period of 5 days), the stock price of this great company came into existence on October 11, 2012. That day the price on the chart opened at 181. Technically, two Exponential Moving Averages periods 11 and 56 are used on the chart. The EMA 11 is above the EMA 56, which means the price has been in an uptrend since its inception. This is a ‘buy’ signal. This market closed today, at 193, showing a considerable gain since last week. The resistance levels that would be breached to the upside are 194 and 195, whereas the support levels at 192 and 191 ought to do a good job halting very serious bearish plunge.

Bullish and bearish forces, i.e. the potency of resistance and support territories, will inevitably continue to the upside. For buyers and sellers in the stock markets, accurate and timely data is a prerequisite for exercising trading decisions. The market reactions must be seen in real time as fundamental figures come out. The market can only go unremittingly up or down (not baulking). If some other risk factors are also taken into consideration, you would undoubtedly reach a conclusion that it pays to only stick to what ensures survival in the nonzero-sum game.

Conclusion: It stands to reason that Direct Line Group stock would go up. Speculation needs not be daunting if you have come across an appropriate methodology. In the opposite, the more experienced you have as a speculator, the more favorable you would look at the markets – and perhaps maintain your peace of mind no matter what the markets do.

This article is ended with the quote below:

“If you want to succeed as a trader it is not enough to analyze and trade well. You have to grow a thick skin and you have to have nerves of steel!” – Harry Boxer

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