FTSE Technical Highlights:
- FTSE bounce from oversold so far uninspiring
- May see higher prices from here, could stay choppy
- Strength watch ~7370, weakness, 7220, Feb 2016 t-line
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FTSE bounce from oversold so far uninspiring
A week ago when we last took a look at the FTSE, we noted that the key-reversal bar amid oversold conditions was viewed as likely to lead to a bounce. So far, gains have been effectively limited to one day worth of rallying, the first day out of the reversal.
A further rebound will keep the footsie intact for now, with resistance first clocking in around a slope located near 7370. This may be the first area to look for renewed weakness back towards the reversal-day low at 7220 and long-term trend-line support. A breakdown below 7220 and the Feb 2016 trend-line is seen as a catalyst for igniting another round of selling. For now, trading is expected to remain choppy.
The Feb 2016 trend-line is an important one, and really the last line of defense before the bottom of the broad ‘RST’ pattern comes into play. The longer-term Reverse Symmetrical Triangle (‘RST’) we’ve been tracking since late May is in full swing and suggests, broadly speaking, the path of least resistance should remain down. How that plays out is still up in the air as the market chops around and works off oversold conditions.
FTSE Daily Chart
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FTSE Weekly Chart ('RST' in progress)
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---Written by Paul Robinson, Market Analyst
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