Searching For Resistance

Searching For Resistance - By: Murray Nickel, Posted on: 2007-07-17

When almost every market everywhere seems to be breaking out into new all-time highs, that's a strong bullish sign!

But with so many markets in uncharted territory, it makes it hard for the technical analyst to know just how far a rally might run. Where will the next level of resistance be that results in a significant pull-back?

But not all major market indexes are at new highs. There's two major markets that are still way below their all-time highs, and could help us see where the next bands of resistance lie. One is from USA the other from Japan:

* NASDAQ 100 (NDX) is sitting near 2030 - well below its all-time high near 4800.

* NI225 - Nikkei 225 Index, Japan - is sitting at 18,220, less than half of its all-time high set way back in 1989 at 38,957.

Starting with the Nikkei 225, the next strong resistance band should be in the 19,500 - 21,000 range, with any push over 20,000 likely to be brief and lead to a strong pull-back.

That slide from a high of 38,957 to a low of 7604 will be 50% retraced at 23280. So after a serious pull-back from the 19,500 - 21,000 range, a further push to over 23,000 is possible - just don't expect to get there in a straight line!

For NDX, the next resistance band is in the 2080 - 2191 range, and if it eventually reclaims 50% of the lost territory it will ultimately push to near 2800 - about 38% above todays level.

So the answer to where the next level of resistance lies may be as close as +2.5% (NDX) or as far as +9.8% (NI225) - the point is that no market climbs higher in a straight line, even when in new territory, so these are two points where we should be on high alert.

Article Source:- Directory Submission & Sexy Deepika Padukone

Murray Nickel is a mathematician, statistician, and professional trader. He offers a free trial of trading signals for global market indexes and index ETFs, spot Forex, and spot Gold. He also mentors traders aiming to build consistent success at trading global markets.
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