FTSE seems to have carved a lower top around 6300 mark over the last week. The indice has since reversed sharply and looking to break below 6000 in the immediate future. Bears are poised to remain in control as they target below 5575, going forward.
FTSE probable wave counts are as follows: The indice had earlier dropped from 6500 through 5931 levels unfolding into 5 waves. This has been marked as an impulse Wave 1 on the chart displayed here. An impulse wave is ideally followed by a corrective wave.
The subsequent rally towards 6340-55 was a corrective flat labelled as a-b-c Wave 2 on the chart here. Also note that Wave 2 had reached between fibonacci 0.618 and 0.786 of the earlier drop, before reversing lower again.
If the above counts hold well, FTSE might be unfolding Wave 3 since 6355 levels. Going further, the indice might have carves lower degree waves I and ii around 5860 and 6300 respectively. Bears should remain poised to unfold waves iii, iv and v lower towards 5575, to complete Wave 3.
Only a break above 6500 would change the above bearish structure. Until that, FTSE should be heading lower towards 5575 at least. Immediate resistance is around 6500, while support is around 5630 levels respectively.
Traders might have initiated fresh short positions around 6300 mark over the last week with protective stop above 6500 levels. The projected target could be towards 5575 and lower, before FTSE could find some support.
Technical Analysis Team
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