Technical Update - FTSE 100 and 250 above falling trendline. Will it continue higher? Strong resistance ahead
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
FTSE100 (UK100 cfd) and 250 testing trend line in falling wedge pattern. If closing above there could be further upside. Strong resistance ahead is likely to cut the rebound short.
Covered in this article: FTSE100, FTSE250 and UK100cfd
FTSE100 is at the time of writing breaking the steep falling trendline in what looks like a wedge. If closing the day above FTSE could extend its rebound to test 7K possibly shooting up to key resistance at around 7,088. Divergence on RSI suggest higher levels on the Index but if selling pressure resumes and RSI breaks below its lower rising trendline the rebound scenario is likely to be demolished
If the positive mood fizzles leading FTSE to close back below the falling trendline selling pressure could resume pushing the Index to new lows
Medium-term trend is still down (see weekly chart) and if key support at 6,788 is taken out FTSE 100 could drop to the strong support area at 6,484-6,397.
Weekly RSI below 40 supports the bearish outlook.
Similar picture on UK100 cfd/FTSE future. Testing the falling trendline. Resistance at 7,103. If selling pressure resumes and RSI breaks below rising trendline lower levels below last week’s low at 6,704 is likely.
FTSE 250 is having another go at closing above the falling trendline after failing Friday. If it succeeds this time FTSE250 could test resistance at 17,822. A close above and 18,288 is next resistance.
If buyers cannot keep FTSE250 and has to let it slide back, a close below last weeks low at 16,520 is likely to fuel another wave of heavy selling.
The low last week was a bounce from strong support at around 16,707. A close below that level is likely to make the Index be hit by heavy selling down to around 15,194
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)