FTSE falls in expected correction
James Chen December 4, 2013 7:58 PM
<p>The FTSE 100 (daily chart) has dropped sharply for the third consecutive day this week, establishing a new seven-week low. This decline thus far constitutes […]</p>
The FTSE 100 (daily chart) has dropped sharply for the third consecutive day this week, establishing a new seven-week low. This decline thus far constitutes an expected magnitude of correction after the index over-extended to hit an intermediate high at 6819 in late October. The current drop has brought the FTSE tentatively below both its 50-day and 200-day upward-sloping moving averages, which have also notably occurred during both of the last two major pullbacks – in late June and early October.
What is also now occurring that has occurred in the last two major pullbacks is a conspicuous approach of the accelerated uptrend line that extends back to the May 5225-area lows. Whether the index turns back to the upside at or around this trend line support area as it did the last two times still remains to be seen. If this turn back up from support does indeed occur, upside resistance targets reside around 6650 and then once again up in the 6800 area. In the event of a breakdown below the current trend line, key support resides around the 6315 level.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.