🥊The FTSE is sitting on major support, will it break down?🥊
I have drew an easy to understand technical chart of the FTSE 100, highlighting the major support and resistance areas from March to July, using a daily chart (each bar is 1 day of trading on the FTSE100).
We can see that the 5,000 area acted as major support level in March, on 4 days wicks broke the 5k level but closed above (that tell us this is a huge support area).
FTSE bounced from the 5k area to break the 6,000 area on its second attempt, and since has been ranging between 6,500-6,000 area.
You’ll notice these support and resistance numbers are very well rounded (5k, 6k, 6.5k), bigger support levels on larger time-frames are often connected to psychological levels, because everyone investing/trading is watching these levels and it's why they work so well.
Moment on the RSI is below 50 and is fading, during the high in June it did not break the 70 level which is a little worrying, I read it as buyers not believing in the rally with more downside to come in the coming weeks.
We ended the week at 6,095 and bounced nicely off 6k support.
What happens next?
If we break the 6,000 level head lower, this leads to a path to re-test the 5k level. For a breakdown to happen I would want to see 4-5 days in a row that the FTSE closes below 6k. It can very well close 1-2 days below 6k and the next day break up and crush shorts (known as a bear trap).
If we do break this level I’ll be looking to add to my positions on the stocks I think are going to benefit in a potential rescission/depression/stagflation environment listed on the FTSE100.
For the FTSE to show signs of strength, it first needs to take out the minor resistance level at 6,350~ level, before taking another run at the 6,500 level.
Until there is a CLEAN break of the 6,000 level downwards or the 6,500 range upwards, the FTSE is consolidating in a range, it’s up to buyers and sellers to decide the road it takes next.
If you like my chart feel free to give my charts a follow :).
We can see that the 5,000 area acted as major support level in March, on 4 days wicks broke the 5k level but closed above (that tell us this is a huge support area).
FTSE bounced from the 5k area to break the 6,000 area on its second attempt, and since has been ranging between 6,500-6,000 area.
You’ll notice these support and resistance numbers are very well rounded (5k, 6k, 6.5k), bigger support levels on larger time-frames are often connected to psychological levels, because everyone investing/trading is watching these levels and it's why they work so well.
Moment on the RSI is below 50 and is fading, during the high in June it did not break the 70 level which is a little worrying, I read it as buyers not believing in the rally with more downside to come in the coming weeks.
We ended the week at 6,095 and bounced nicely off 6k support.
What happens next?
If we break the 6,000 level head lower, this leads to a path to re-test the 5k level. For a breakdown to happen I would want to see 4-5 days in a row that the FTSE closes below 6k. It can very well close 1-2 days below 6k and the next day break up and crush shorts (known as a bear trap).
If we do break this level I’ll be looking to add to my positions on the stocks I think are going to benefit in a potential rescission/depression/stagflation environment listed on the FTSE100.
For the FTSE to show signs of strength, it first needs to take out the minor resistance level at 6,350~ level, before taking another run at the 6,500 level.
Until there is a CLEAN break of the 6,000 level downwards or the 6,500 range upwards, the FTSE is consolidating in a range, it’s up to buyers and sellers to decide the road it takes next.
If you like my chart feel free to give my charts a follow :).