FX:UK100   FTSE 100 index of UK listed shares
1. Price initially consolidated within a large triangle and eventually broke out
2. Price rallied towards 127.2% and in the process formed a rising wedge
3. Price often reverses from 127.2% back to 100% (You check my past trade ideas with flags to notice this common occurrence)
4. Price then forms a bearish flag at the 100%
5. A break out to the downside will see price go back to 61.8% of the initial triangle pattern
6. This 61.8% if the first triangle, forms 161.8% measured objective of the bearish flag (GOOD Confluence = Buy Zone)
7. From 6571 - 6528, FTSE             should embark on a rally towards the final objective to 7100.
I'll update this chart on a weekly basis to track the progress.
Lovely analysis! I see the same thing although I'm not certain that bear flag can't develop into a bull flag. This weeks price action should give us more clues.
+1 Reply
Thanks for your comment. For a bear flag to turn into a bull flag (which is rare) we'll have to see a sharp rally and a small downward sloping consolidation. But given the fact that the flags are formed after a sharp rally or a sell off, it is unlikely to change course and move in the opposite reaction.
Would be a confirmed decline if price now reverses from 6808/61.8% Fib and makes a close below 6750.
+1 Reply
Yep. Looks like a bear flag after today.
Upside capped by 0,236 Fib expansion of the last big swing high. You were right. I entered short. Been looking at flags a lot recently and noticed they can develop either way on occasion which was the reason for my hesitation. Are you taking a position on this?
Yep, in a few hours when the market opens.
Not as neat as yours :)
+1 Reply
Will need to see a break below 6715 for confirmation, probably a good level to move to break even on a close below 6715.
You were right to wait for confirmation. I got stopped out very quickly. I switched to long at the 50% retrace of the move down but it's a tiny position. Looking to add somewhere.
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