21Nov2011 FTSE Short term Outlook: Today on H4 charts FTSE broke 5300 level (base of consolidation pattern) decisively and trading well below these levels since the opening. With the breaking of 5300 level, outlook has turned out to be bearish for short term.
Analysis: Few observations are given below for the FTSE daily as well as weekly charts:
>>With the breaking of important support 5300, all bullish hopes have been turned down and signifies that next leg of downturn can be started from here.
>>FTSE has been trading well below 50day MA for the 3last days.
>>RSI and MACD levels are trading below their 9day MA.
>>Minimum target should be 5730-5300=430 points below 5300 i.e. 4870 levels for the short term in 1-2 weeks.
In broader term, FTSE is correcting the up move from 3450 to 6050. 50% Fib level 4755 will be acting as strong support. But from the patterns of FTSE it seems that it can go into a long term downtrend. Monthly charts of FTSE are forming "Rounding top formation" although the pattern will complete only if the neckline 4755 is broken, post this giving much lower targets for FTSE.
Conclusion: In view of the above, we expect downtrend in FTSE atleast for the short term as long as it stays below 5437. Although the major bearishness will come only below 4755.
Short term: Short FTSE on intraday rallies to 5270 keeping a stop loss at 5350 with a target of 5100. Positional trade: Short FTSE arround 5270-5300 with a stop loss at 5405 with a target of 5000-4900.
*Disclaimer: All the post views are informative only and purely based on technical analysis. It does not guarantee 100% accuracy. We will not be responsible for any financial loss.
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