FTSE Holds Below Resistance At 6500

20 July 2020

FTSE has rallied through 6320 levels over the last week. The structure continues to remain bearish as highlighted on the 4H chart here. The indice is holding well below resistance around 6500 levels and should resume lower towards 4700 soon.

FTSE has rallied through 6320 levels over the last week. The structure continues to remain bearish as highlighted on the 4H chart here. The indice is holding well below resistance around 6500 levels and should resume lower towards 4700 soon.

The potential wave counts for FTSE are as follows. The indice had earlier dropped from 7724 through 4750 levels, sub dividing into 5 waves (not seen here). It has been marked as potential Wave (3) of one higher degree.

An impulse drop is ideally followed by a corrective rally. FTSE had rallied from 4750 through 6500 levels, sub-dividing in 3 waves labelled as A-B-C (not seen here). The termination could be higher degree Wave (4) (not shown here).

If the above larger degree counts are correct, FTSE should potentially reverse lower towards 4750 and further, while staying below 6500/10 resistance. Let us now have a look at the lower degree wave counts sine 6500 highs.

The drop from 6500 through 5930 was again an impulse wave (5 waves). This has been labelled as lower degree Wave 1 on the chart here. Since then, the indice has been carving a corrective wave to terminate Wave 2.

The corrective wave might be complete at 6320 highs over the last week. We have labelled a-b-c, which terminated as potential Wave 2 around 6320 or could print another high towards 6360 levels. This could be a flat corrective structure, before FTSE resumes lower again.

Prepared by
Technical Analysis Team

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