The RSI is hovering in the overbought territory, however, the bullish momentum is very strong and it would take more than just overbought RSI to trigger a correction.
A potential bearish price RSI divergence could yield a corrective move to 7122 levels.
Taking note of the critical levels on the lower side is very easy when the index is at record highs....
Admiral is looking pretty sick while the overall market hits new all time highs. The shares have failed at trend resistance and also the neckline resistance of the top pattern. The shares are making new lows on a relative basis and look set to continue lower in the near term. The shares will be particularly vulnerable should the FTSE100 undergo a correction....
We are on the hunt for short ideas as we expect to see some form of pullback in equities in the short term. Sage Group is in a long term downtrend and has underperformed the benchmark index over the past 1-3 months on a relative basis. The shares have rallied into downtrend resistance as well as a combination of the 50 & 200 day moving average. There was also a...
As I write this we are in a fairly steady bull trend since the start of the trading year, and with the bulls breaking and holding above 7200 on Friday, it’s holding up, despite looking toppy. The reason I say that is that we have a daily RSI reading of 85, and whilst this can remain overbought (or oversold) for a while, while the markets move higher or lower,...
We like GKN over the medium term and hoped to see the shares break to new highs. This is looking increasingly unlikely in the short term as the shares stall at resistance. The bearish divergence on the RSI and the relative ratio is a concern. If the shares close at this level or lower (329p) then we will also have a nasty looking bearish engulfing candle.
Maybe a...
Legal & General is currently trading above major resistance. The break of this level suggests that the medium to long term outlook is positive from here. We will wait to see if this break can hold on the weekly chart before committing longer term. In the short term the momentum is strong and further gains could be seen. Gap resistance around 267p and the 78.6%...
Marks has rallied into multiple levels of resistance on the daily chart. This is the top of the range where previous highs have stalled. It is also the 200 day moving average. There is divergence on both the relative ratio(vs UKX) and the RSI, which suggests the momentum is stalling. Sell with a stop at 364p, targeting a move towards the lower end of the range at 308p
At 7280 FTSE will be at 1.618*W1 which is very likely the target for wave 3. Notice the Wiv low at almost exactly 38.2. The recent action appears to be a three and might be the first part of a rising wedge, or the middle part of a flat. It can also be the 5th wave of course if W4 ended at 'b'.
We are a fan of Johnson Matthey over the long term. The recent correction looks to be a great chance to buy the FTSE100 chemicals company. The shares have formed a channel on the weekly charts and also found support on a relative basis versus the index. There is big resistance at 3575p, which if overcome could open up the upside towards 4000p and beyond. The long...
Pearson has rallied into resistance at the 200 day MA and the high seen in October. This has also been mirrored on the relative ratio. The stock appears to be rolling over here. We suggest selling with a stop at 860p, this is above the resistance and the 50% Fibonacci retracement level from the highs in June to the low in November. Target 715p
BP has rallied into resistance at around the 500p level. This is probably a call to take a bit of profit rather than initiate a speculative short. Medium to Long term we are a fan of the oil majors.
Babcock has failed at the top end of a well-defined downtrend channel. The shares are under performing the benchmark on a relative basis across multiple time frames and making new lows.
Sell with a stop at 963.5p and target 851p
DCC has corrected sharply in recent weeks and now appears to be stabilizing in line with the dominant uptrend support line. The bullish divergence on the RSI is another reason to believe that a bounce could be seen in the short term.
Unilever has formed a small base on the daily chart inline with major support. There is also bullish divergence on the RSI and we believe scope for a bounce towards 3400p in the short term.
We could see this grind towards the target over the Christmas period.
We have the Fed rate decision later, expected rate rise to 0.75%. The FTSE will likely be fairly flat today, but has resistance at 7005 and 7030. 6975 which was the Hull 100 moving average on the 2 hour chart has capped the Tuesday bull run, though bulls will be keen to keep the momentum going with 6950 support. Below that then 6860 is daily support for the...
A gap down open is more likely on account of the no vote win in the Italian referendum.
However, this was priced-in, so we could see a quick recovery. Currency markets have already recovered from the early Asian shake up.
The previous two daily candles have long talks…which suggest dip demand.
Overall, ‘Santa Rally’ could begin from this week in case the...
