Technical Update - FTSE 100 and FTSE 250 testing resistance levels. Correction is in the cards
Kim Cramer Larsson
Technical Analyst, Saxo Bank
FTSE 100 reached the 0.764 projection of the double bottom last week. There is divergence on RSI (Divergence is when the price is making a new high/low and the RSI is not making a new high/low i.e., the peaks and troughs price vs. RSI pointing in different direction) That is sign of trend exhaustion and indicates FTSE 100 could have peaked.
However, if FTSE closes 7,409 the uptrend could extend to 7,578 possibly 7,670.
If FTSE slides back and closes below 7,244 Bears could get a second wind pushing the Index down to around 7,100
FTSE 250 is being rejected at the 200 daily SMA and resistance at 19,616. A correction should be expected. A correction that could test the medium-term falling (black) trendline and short-term rising trendline. If FTSE 250 closes below 18,493 selling pressure could accelerate pushing the Index lower.
However, there is no divergence on RSI indicating higher levels could be seen, possibly after a correction. If FTSE 250 closes above 19,722 20K is to be tested but there is room up to around 20,467.
The medium-term falling trendline has been broken and a close above 20,467 will reverse the medium-term bearish trend. See weekly chart.
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