FTSE Technical Highlights:
- FTSE in oversold territory, bounce due
- Semi-bullish key-reversal yesterday
- Looking for only a recovery at this time
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FTSE in oversold territory, bounce due
The FTSE has been beat up pretty good in recent weeks, but for now its woes are poised to be put on pause as oversold conditions and bullish price action suggests a bounce, at the least, should develop. At this time a reprieve may be all we see, but for those who have been hitting the down-move with shorts, now may be the time to take a step back, or at least consider using some type of trailing stop to protect profits.
Yesterday’s reversal bar wasn’t uber-convincing, but enough to tap the brakes on what has been a drive down a one-way street. Should a decline below yesterday’s low negate the reversal bar, we’ll look to the Feb ’16 trend-line as another point of interest. Given how sharp multi-week decline, a bounce back towards 7400 looks reasonable to expect. The lower parallel tied to the trend-line off May high lies around 7375, but its exact location depends on when price meets it, should it.
FTSE Daily Chart (Oversold, key-reversal)
Longer-term, the bearish Reverse Symmetrical Triangle (RST) is in full force right now and has the footsie looking geared up for a run on the bottom of the pattern in the 6800s. We’ll monitor how any bounce from here unfolds and then switch gears towards the bearish camp should price action warrant such a maneuver.
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FTSE Weekly Chart (Overall, still looking for base of pattern)
Check out this earlier piece by my colleague, Martin Essex, concerning the impact of Brexit and the FTSE.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX