What is the next price
direction on the FTSE 250 (FTSE:MCX)? Would the price continue going upwards,
as it has been doing recently? Is it now the time to start shorting the market?
The forecast below would answer the questions above. FTSE 250 is a market that
should be handled by skilled traders only. The elephant’s head is more than
what a child can carry.
Technical Forecast
The chart below
points to an uptrend – a bullish signal – that started several days ago.
Whatever the reasons given for this, ultimately, it would merely be
accumulation and distribution with limited accumulation expanding as a result
of more buying pressures. For this analysis, the Exponential Moving Average period
21 and the Williams’ Percentage Range period 20 are used. Since the beginning
of December 2012, the market has been in a bullish mode: the price is above the
EMA 21, and the Williams’ % Range is in the overbought region. This means that
the northward determination is very strong. Besides, it should continue as
such. Therefore one would do well to consider long opportunities only (and this
is no harum-scarum), especially when the market retraces back to certain support
levels, say 1.2100 or 1.2050.
When would one
short this market? This uptrend would definitely not go on forever. Therefore,
one would short only when there is a clear indication that the extant bullish
phase is over. That would be when the price goes below the EMA 21, and the Williams’ %
Range goes into the oversold region or gong very close to that region. The 2 conditions
above must be met; otherwise one would not consider it a bearish signal.
Sharpening your trading skills as far as possible is something you do without
ceasing. You would simply observe whether there is a selling pressure in the
market; or a buying pressure, and this is the junction where technical analysis
is relevant in affirming the market bias.
Conclusion: The market in question here, FTSE 250, would
continue going up. No market should be shorted merely because it is very dear. Any
attempt to do that could prove to be Mephistophelian in nature. Even a pullback
in a context of an uptrend should be seen as an opportunity to buy cheaper. For
you to sell there must be a bearish confirmation signal. Until then, what we
have here is a northward outlook.
This article is ended with the quote below:
“The reality is that trading and investing success comes
through hard diligent work. I’ve written about how you can’t realistically
expect better money than other professionals without working hard… Learning to
take consistently small losses is the only way to market generated riches”
- Richard Chignell (Embracethetrend.com)
NB: You would be
exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
Copyright (C) ADVFN PLC
For more articles, go to: http://www.advfn.com/newspaper/authors/azeez-mustapha
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