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The FTSE Uptrend & Forecast to Dec 06

Stock-Markets / UK Stock Market Sep 11, 2006 - 10:35 PM

The uptrend from the June low is being tested as the FTSE falls towards 5800.

Will it hold ?

Technical Analysis 1. Price Patterns - After the sharp sell off, the FTSE made a double bottom which targeted a move back towards 6100. So far the FTSE action is confirming this trend, as long as the FTSE is making higher highs and lows then that price patterns target remains intact
Resistance - Immediate resistance is at 6100, followed by the 6135 high.
2. Support - Immediate support is at 5750, then 5650, then the June lows of 5460..
3. MACD - (Bottom indicator) - The macd has been gradually unwinding the oversold state, but the bull markets trend has been clearly weakened, which suggests that the continuing trend is likely to be rougher as it approaches the previous highs in the region of 6100, and the market may even move sideways before breaking higher.
4. 40 week Moving Average - Is continuing to act as support, though the June low has weakened it significantly.
5. Uptrend Line - .
6. Time - Late October through December is traditionally the best period to hold stocks, with that in a view if the FTSE is to break above previous highs it would occur during this time period i.e. by end December 06.

Conclusion - The FTSE continues to target previous highs, but the trend since the June correction is relatively weak, so there could be much volatility, it may play out this volatile uptrend all the way into late December 06.

Buy Trigger - The FTSE is a buy as long as support holds, the nearest trigger is 5860.
Target - The FTSE is first targeting 6000, 6100 and then new highs.
Stop-Loss - The nearest stop loss level would be under the 5750 low or at 5730

Nadeem Walayat

(c) MarketOracle.co.uk 2005-2006

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