FTSE Chart Analysis – Trying to Reverse from Critical Area of Support
FTSE Technical Highlights:
- FTSE trading around Sept low, Feb ’16 trend-line
- May try and build on yesterday’s reversal
- Long-term 'RST' pattern remains in progress
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FTSE trading around Sept low, Feb ’16 trend-line
Yesterday, the FTSE extended the sell-off into a critical area of support. A break of the September low took shape, but a reversal higher managed to keep price above on a closing basis. The smallish key-reversal also came at the February 2016 trend-line.
The last time we saw the market decline sharply and reverse (last month), we saw a sharp move higher. Whether such an aggressive move can develop this time or not is of course to be seen. The reversal day at support coupled with the fact the footsie is oversold in the near-term should be enough to tilt the market higher for a recovery bounce, at the least.
FTSE Daily Chart (Reversal from confluent support)
A close below yesterday’s low at 7183 will negate a reversal and will have the FTSE in real danger of sinking much further as meaningful support levels are lacking until towards the March low. From a macro standpoint, the low from the spring at some point indeed looks at risk with the ‘RST’ pattern we’ve discussed previously in full force.
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FTSE Weekly Chart (‘RST’ in progress)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX