Technical Update - Italian Equities hit by heavy selling. Will it continue?
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
The FTSE MIB Index (Milan Stock Exchange Benchmark Index) future/Italy40 cfd is in a medium- and short-term bearish trend. It has broken support at around 21,127 and is on course to test next support at around 20K.
On the weekly chart there is currently divergence on RSI indicating a possibly short-term exhaustion. However, the trend is down and there seems to be strong selling pressure.
On the daily chart Italy40 is in a down trend but seems to be forming a falling wedge like pattern. Falling wedges are usually reversal patterns and with the divergence on the RSI (RSI values are not making new lows when price is making new lows, an indication of a trend weakening)
If Italy40 breaks above the upper falling trend line we could rebound to resistance at 21,833 potentially 22,538.
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