scorpiousg
Long

IS A RELIEF RALLY IN THE CARDS FOR THE FTSE 100

FOREXCOM:UKXGBP   UK 100 CFD
If you're anything like me, as a trader you likely have a traded instrument that is kind of favourite. For me it is the FOREXCOM:UKXGBP mainly on account of the fact that I cut my trading teeth on this index. So if indices are a part of your portfolio, this could be a profitable opportunity.

This index (like many others and the Equities they derive their value from) have been taken quite the beating of late. That said as we all know what goes down must invariably bounce... The million dollar question we all seek though is when and how high.
Looking at this index from the perspective of the Daily Charts , we have now come back to retest previous structure lows established prior to that massive rally that saw the index achieve all time highs.
As we have done so, six things have caught my attention:
1. The index has put in quite the pretty pinbar/hammer candle at structure support (look leeeeft, structure leaves some beautiful clues)
2. In the process of doing so, we can see some Bullish Divergence (Lower lows in price action, Higher Lows in Stochastic )
3. Depending on your rules for this pattern, we have just completed a weekly Bullish Bat Pattern
4. There is potential Bullish Divergence setting up on the Weekly Charts (though there is still room for confirmation)
5. We have a harmonic Equal Measured Move (E.M.M) to the Weekly Bat Pattern completion, though there is little in the way of confluence
6. Dropping down to the 4H Lower Time-frame, we have again, Bullish Divergence but this time coupled with a Double Bottom at the Daily Structure Support level, but more interestingly, holding above the Weekly Bull Bat Pattern completion level.


I would dare say that the stars may be aligning on this one for a short term relief rally for this index as we edge closer to the end of the year.
That all being said, I see the Daily Structure support level as a key decision point for this market so, I would be a tad conservative in my target estimates using the 38.2% and MAYBE the 61.8% retracements as potential profit taking levels, in anticipation of this market coming back to retest and possibly reassert bearish dominance at the lows.
Not withstanding, based off a Weekly pattern analysis, no matter how conservative the targets, this could still prove to be a nice earner if my prediction is correct and one can obtain a good entry reason with a decent reward to risk profile.

Good luck and stay disciplined and safe in your trades as we come to the end of the month and the years end if you are able to get involved in any decent trades.
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