Daily FTSE Technical Update |
by, James A. Hyerczyk
After successfully testing and holding the 5858.00 level as well as the support line of a triangle chart pattern on the 60-minute chart, the FTSE 100 finally broke out to the upside. The triangle chart pattern which is known as a non-trending pattern helped the index form the support base that triggered the breakout rally over minor tops near 5898.00.
The compression of both the support and resistance lines inside of this chart pattern, were clear indications of impending volatility. With the index’s range tightening each day inside of the chart pattern, volatility was building for a large move in either direction. Once the index failed to break through support on three attempts, short traders who had been in control of the market, decided to cover their positions, initiating the drive to the upside.
Based on the main range of 6103.73 to 5858.00, expectations are for this index to retrace to at least 5980.86 to 6009.86 before meeting strong resistance. A failure to rally through this area will mean the formation of another lower top which will be indicative of topping action.
About the author: Autochartist
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