Daily FTSE Technical Update |
by, James A. Hyerczyk
The FTSE 100 took a breather on Friday after reaching a new high for the year the day before at 6101.42. The inability to pierce this high and the lower close may be early indications that the selling is greater than the buying at current levels. Another sign that selling pressure may be building is the failure once again to finish above the February 8 close at 6091.33. Although this price has been exceeded a few times, sellers have come in late in the session to force a close below the highest close for the year.
Trend traders may be watching the higher-top, higher-bottom formation, but the inability to close on the high tick may be indicating that investors are not willing to buy strength despite the prolonged up move. This usually indicates a continuation of the back-and-fill trading strategy whereby investors buy value on dips rather than chase strength.
Technically the 60-minute chart indicates three developing scenarios. Short-term analysis indicates a range of 6048.83 to 6101.42. This creates retracement support at 6075.13. Intermediate analysis shows a range of 6023.77 to 6101.42 and 50% support at 6062.60. Finally, the main range is 5973.44 to 6101.42 with the major retracement zone identified as 6037.43 to 6022.33.
If investors are going to continue to buy breaks and sell rallies, then each of those retracement prices are likely to attract fresh buying. Until the pattern is broken, continue to look for the FTSE 100 to grind higher.
About the author: Autochartist
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