TA 125 Forecast Today 04/07: Looking For Pullbacks (Chart)

(MENAFN- Daily Forex)

• During the trading session on Thursday, we have seen a continuation of the bullish behavior in Tel Aviv, as the TA 125 continues to be one of the better performers.
• You can see clearly that over the last 12 days or so, basically at the conclusion of the military actions between the Israeli Armed Forces and the Iranians, the TA 125 has launched into the stratosphere.
• At this point, it is worth paying close attention to see whether or not there is going to be an opportunity. This is a bit tricky, because when markets truly take off like this, traders will often ask the question of“when can I get involved?”

There are massive amounts of traders out there willing to jump in and start buying this index right away, but simply getting involved in“FOMO” is a recipe for disaster, especially after we have seen a 10% move in just a couple of weeks. However, it's likely that the TA 125 will have to give up some of the strength as we have broken above the 3100 ILS area, and ultimately, a little bit of profit-taking is certainly prudent.

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Tel Aviv features a wide and diverse set of companies, but it's 3 biggest sectors are financial services, healthcare, and technology. Most foreigners think of companies like Teva, as it is a well-known pharmaceutical company around the world. However, there are other biotech firms that are currently doing fairly well such as Perrigo. However, it is worth noting that the financial services sector should do fairly well, as peace breaking out of the Middle East allows for the possibility of more construction and deals to be made.

From a technical analyst perspective, the first thing that captures my attention is that the 2775 ILS number, where we broke out from, also features the 50 Day EMA. I think that's the“floor in the move”, meaning that if we were to break back below that level on a daily close, then maybe things change. However, I would also pay attention to the 3000 ILS area, because it's a large, round, psychologically significant figure, and could be a floor in what traders might think of as a consolidation range in order to“work off the froth.” We could just simply break the top of the shooting star from the Thursday candlestick, but quite frankly I don't like that as we will get far too stretched. Ultimately, this is a market that you're looking for dips and a bounce to start buying student get on the“right side of the V.”

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