The last time we reported on the Long Gilt was the 25th of March. Back then we had seen a Bearish Spinning Top followed by a gap lower, also Bearish. We were targeting a sell off down to the 110.51 level, which basically happened that day. We continued selling off though, eventually reaching a low of 109.93. The last two days have seen a massive turnaround for the Bulls as they have swiftly taken back all of these losses. Once again we will have the chance to see if we can close or breach the gap at 111.51.
Indicators in Play
As we know from our last Gilt report, a gap lower, especially after a Bear signal in a Bull trend, is bad news and acts as resistance. Even after a bounce these are still major hurdles to overcome before we can think in terms of the sellers having gone away.
Summary
We started the day full of promise but the play for us is still to sell strength to the gap at 111.51 with a tight stop. If we can hold above yesterdays low at 110.80 we should take a look at this gap. A push through here later in the week would see the Bulls go for the recent highs again but this wont be easy!
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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