Most Popular
1. Dow Max Drawdown Bear Stock Market 2022 - Accumulating Deviations from the Highs - 21st Feb 22
2.Putin Starts WW3 in Ukraine, Will Use Tactical Nuclear Weapons, China Prepares Taiwan Blitzkrieg - 28th Feb 22
3.World War 3 Phase 1 - Putin WINS Ukraine War! - 25th Feb 22
4.INVESTORS SEDUCED by CNBC and the STOCK CHARTS COMPLETELY MISS the BIG PICTURE! - 10th Feb 22
5.Will There Be A 2024 US Presidential Election? - 3rd Mar 22
6.Gold and SIlver, Precious Metals Sector Is at a Terrific Buy Spot - 6th Feb 22
7.Why Putin Wants the WHOLE of Ukraine - World War 3 Untended Consequences - 6th Feb 22
8.Dow Stock Market Expected Max Drawdown 2022 - 19th Feb 22
9.Stock Market Calm In the Eye of the Inflation Storm - 4th Mar 22
10.M = F - Everything is Waving! Stock Market Forward Guidance - 7th Mar 22
Last 7 days
How Low Could the Amazon (AMZN) Stock Price Fall? - 19th May 22
Bitten by FANG? Clocked by Cryptos? -- 'Air Pockets' Everywhere - 19th May 22
Northern General Hospital Orthopedics Fractures and and Ankle Clinic Consultations Real Patient Experience - 19th May 22
Cathie Wood Goes All in on Teladoc, ARKK INSANE Noob Investing Strategy! - 17th May 22
This is Anything but Positive for US Housing Market - 17th May 22
What Should We Do If There Is No Fed Monetary Policy Pivot? - 17th May 22
All Possible Ways to Earn Free Litecoin - 17th May 22
How low Could the Amazon Stock Price Fall? - 16th May 22
Cathy Wood ARKK INSANITY There is NO Coming Back! - 16th May 22
NASDAQ 100 Stock Market LOWER LOWS & LOWER HIGH - 16th May 22
Sanctions, trade wars worsen US inflation - 16th May 22
AI Tech Stocks Earnings BloodBath Buying Opportunity - 14th May 22
Futures Contract – Trading Crude Oil With USO - 14th May 22
How to Get Kaspersky Internet Security for 80% Discount! Do not Pay Renewal Price! - 14th May 22
Sagittarius A* Super Massive Black Hole Monster at Centre of Our Galaxy REVEALED! - 14th May 22
UK Public Debt Smoking Inflation Gun - 13th May 22
What Happens When the Stock Market Dip Keeps Dipping? - 13th May 22
Biden Seeks Inflation Scapegoats; Gold Advocate Wins GOP Primary - 13th May 22
Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - 12th May 22
The War on Gold Ensures the Dollar’s Downfall - 12th May 22
Crypto Investors Stable Coins TERROR as Terra USD COLLAPSEs towards ZERO, Tether Next! - 11th May 22
INFLATION IS KILLING SILVER - 11th May 22
The Dominant Investing Theme of the Decade - 11th May 22
Is Bitcoin Headed to Zero? - 11th May 22
RECESSION RISKS 2023 - 10th May 22
The Future of the Dollar Seems So Bright It’s Blinding Gold - 10th May 22
Take Advantage When Markets Succumb to Fear - 10th May 22
How to Recognize a Less\ Than Obvious Opportunity (In focus: Corn) - 10th May 22
How to Ensure Financial Stability for Your Family - 10th May 22
The Stocks Stealth BEAR Market - 9th May 22
A Strengthening US Dollar Is A Double-Edged Sword - 9th May 22
Making Wise Investment Decisions - 9th May 22
Ways to legalize a Moving Company - 9th May 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

FTSE Forecast - ABC correction - is there more to come or not ?

Stock-Markets / UK Stock Market Jun 24, 2006 - 07:00 PM GMT

By: Nadeem_Walayat

Stock-Markets

The expected correction has occurred on cue, hitting the target of 5,500; but has moved much faster than original expectations !
So where to next ?

FTSE Forecast - ABC correction - is there more to come or not ?


The original expectation was for a trend towards major support along 5,500 by Mid October 2006, but the speed of the decline has already seen the target fulfilled by June 06, more so that the pattern formed is the originally envisaged ABC decline.

Technical Analysis
1. Price Patterns - The decline to the 5,500 target has formed a corrective ABC pattern, additionally the C wave s much milder than the B wave decline and thus suggests higher prices. The closest bullish pattern being formed is a double bottom, requiring a break above 5800 to confirm. The pattern would project a 300 point rally from 5800 or target 6100 ! On the downside, a less likely break below 5470 would see trend all the way down to between 5100 and 5150.
Resistance - As at the last short-term high of 5800 and thus marks a trigger for the end of the correction.
2. Support - Key support lies along 5500, both the previous high and recent activity.
3. MACD - (Bottom indicator) - The sharp break lower has put the MACD into a very oversold state, thus supporting the picture unfolding of a trend higher rather than lower.
4. 40 week Moving Average - The price has been moving around the 40 week Moving average, and thus finding both support and resistance. Which suggests it is likely to hug the 40 week average for some time.
5. Uptrend Line - The initial break of the trendline failed to hold and the FTSE has again crossed above it and again it will act as support, though a much weaker trendline then previously.
6. Time - The picture is confused on what the market is now likely to do time wise, it may trend higher to 6000 and then have another decline towards 5500 by Mid October or not ?

Conclusion - The picture is a little confused, but technically the market is suggesting that the correction is over and higher prices are expected.

Buy Trigger - The Primary buy trigger would be to break above the last high of 5800 which would confirm the double bottom price pattern.
Target - Based on the above analysis the FTSE is targeting a move back to the 6000, as long as support holds.
Stop-Loss - The stop loss would be a distant 5,470, given the price volatility it would need to be set quite far from current price action

Nadeem Walayat
(c) MarketOracle.co.uk 2005-2006

Disclaimer - This Forecast / Trade Scenerio is provided for general information purposes only and not a solicitation or recommendation to enter into any market position, and you are reminded to seek independent professional advice before entering into any investments or trading positions.
The Market Oracle is a FREE Financial Markets Forecasting & Analysis online publication. We aim to cut through the noise cluttering traditional sources of market analysis and get to the key points of where the markets are at and where they are expected to move to next
! http://www.marketoracle.co.uk

This article maybe reproduced if reprinted in its entirety with links to http://www.marketoracle.co.uk


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in