FTSE Near Term Target Could Be 5575 Levels

3 August 2020

FTSE might have carved a meaningful lower top around 6300 levels recently. The indice has since been under control of bears and has dropped through 5900 mark. It has pulled back a bit for now and is trading around 5920 as we prepare to publish.

FTSE probable wave counts are as follows: Looking at the structure since 6500 highs, the indice had dropped towards 5930 mark initially. The drop could be clearly sub-divided into 5 waves, labelled I through v on the chart here.

A higher degree Wave 1 had terminated through 5930 levels. Ideally, an impulse drop would be followed by a corrective rally. FTSE had also produced a corrective rally marked as a-b-c on the chart here.

Wave c got terminated around 6300 levels, completing a corrective flat, labelled as Wave 2. Since then, a similar degree Wave 3 has been unfolding and could extend through 5575 levels as highlighted on the chart here.

If the above wave structure holds true, FTSE will stay below 6500 mark and continue lower towards 5575 and further. Also note that the indice has broken its counter trend line support and prices have entered into sell zone.

A counter trend rally towards 6100 levels remain possible from here. If reached, FTSE would face resistance around the back side of the support trend line. Traders might be inclined to initiate more short positions around 6100 levels.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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