ICmarkets
Long

Nice-looking buy zone setting up on the DOW traders...

FX:US30   Index of top 30 shares on Wall Street
100 0 1
U.S. stocks shredded around 225 points during trading last week, forcing price to close the week lower at 16207. In spite of this, weekly support at 15978 remains intact and should still be on your watch lists. With that being the case, the next upside target as per the weekly timeframe can be seen around resistance coming in at 16935.

Branching lower to the daily chart , support at 16083 is a level of interest to us. Not only because it is located close to the aforementioned weekly support, but also due to how well this daily barrier has held up in the past, specifically during the month of September 2015.

Now here is where things become interesting! H4 action shows that shortly after the NFP had its time in the spotlight, U.S stocks tumbled lower reaching lows of 16127 on the day. Just below this low, however, sits the daily support discussed above at 16083. We are confident that this barrier will bounce price should this market attack this area today/this week, as there are a number of technical aspects that support this view. Firstly, a nice-looking H4 Quasimodo support level is seen drawn from 16047; secondly a H4 trendline support extended from the low 15647and thirdly a H4 38.2% Fibonacci support level at 16092. Couple all of this together with the current daily support and the backing of a weekly support a little lower down on the scale and we have ourselves a neat little buy zone to watch!

Depending on the time of day, our team has come to a general consensus that entering long from here at market is a viable option. To be on the safe side, we’d advise stops to be placed below the H4 trendline, thus allowing the trade room to breathe. First take-profit target falls in around the 16240 region, followed closely by the H4 tops seen above at the 16450 area.

Levels to watch/live orders:

• Buys: 16083 region Looking at a market entry here (Stop loss: 15950 area).
• Sells: Flat (Stop loss: N/A).
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