What’s inside:
- DAX maintaining its bullish posturing
- Support and resistance outlined
- Limited market moving data due out this week; Euro-zone CPI, FOMC minutes tomorrow
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When we examined the FTSE 100 last Thursday we said the short-term trend was weakening, but that we would continue to run with the bullish inverse head-and-shoulders pattern in play since 2/10. The footsie has been very choppy the past few sessions, literally trading today at the same prices it was last Monday. Slowly rolling over, or merely consolidating for another move higher?
Given the generally healthy appetite for stocks, globally, and trend in the FTSE we are giving the benefit of the doubt to the notion of the index undergoing a period of consolidation prior to higher prices. It also doesn’t hurt that there is a good amount of short-term support in the area. Range lows at 7252 along with the trend-line rising up from the Feb 2 low and HS neckline. The triple combination of range low/t-line/neckline makes for a solid confluence of technical events worth leaning on. Stay above, staying bullish; break below, turning neutral to bearish.
The consolidation is beginning to take on the shape of a triangle, and with a little more time could help provide a nice breakout scenario from coiled price action. Ideally, an apex develops close to the trend-line rising up from the Feb 2 low before making a break for it.
In any event, further strength should see the inverse HS to its measured move target (MMT) and record highs from January (7354). A break below beforementioned support could result in a lower high on the daily or a developing range – we’ll delve further into this scenario if it becomes relevant.
FTSE 100: Daily
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—Written by Paul Robinson, Market Analyst
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