Technical Update - FTSE100 testing resistance. Can it break it? FTSE250 broken resistance but has now formed top and reversal pattern
Kim Cramer Larsson
Technical Analyst, Saxo Bank
FTSE 100 has hit resistance at 7,088 (7,103 on UK100 cfd). A close above is needed for further upside.
RSI is still showing negative sentiment and must close above 60 to support the short-term uptrend. If FTSE100 closes above 7,088 it could experience a rally to around 7,300-7,350. But if the Index slides back below 6,864 October low at around 6,707 is set to be tested and likely to be taken out.
FTSE250 after closing above resistance at 12,822 is testing the level from the upper side and has formed a Doji Evening formation – circled – which is an indication of a top and reversal.
RSI, having so far failed to close above 60, is showing negative sentiment supporting the top and reversal picture. If FTSE250 closes below 17,822 that scenario is likely to play out and will be further confirmed by a closed below 17,033.
If FTSE250 closes above 17,180 i.e., the pattern peak, the top and reversal pattern is demolished, and the Index is likely to test 18,493. But there could be room up till around 19,500-19,615 resistance. However, the medium-term falling (black) trendline will provide resistance.
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