Trade of The Day – FRA40

Facts:

• The RSI on the FRA40 chart will again reach a level above 60
• The MACD [12/26/09] line crossed the signal line from above
• The price on the chart is approaching the level of the last peak (around 8630)

Trade : Short position (SELL) on FRA40 at market price

• Target: 8270
• Stop: 8730

FRA40 (D1)

Source: xStation5 OPINION : The RSI [14] indicator has again moved above the 60 level on the price chart of FRA40 contracts, which, as can be observed over recent quarters, correlates significantly with downward corrections. Using the ranges of previous corrections, Fibonacci ranges, and EMA averages, a developing double top formation can be identified, which could push the price below the ~8500 level.

Methodology and assumptions:

• The recommendation was based on technical analysis of the chart, in particular EMA averages, Fibonacci levels, EMA averages, and MACD.
• The target level was determined using Fibonacci levels.
• The protective stop loss order was set based on a favorable risk to reward ratio.