FTSE Resistance Intact Around 6500 Levels

28 September 2020

FTSE had dropped to 577080 levels last week before finding interim support. The indice might be looking to test 6100/6150 handle again before resuming towards 5570/75 zone in the near term. Bears might be inclined to remain in control, going forward.

FTSE short term wave structure since 6500/20 highs is as follows. The indice had dropped from 6520 mark through 5930 sub dividing into 5 waves, making an impulse Wave 1. Ideally, an impulse is followed by a corrective wave in the opposite direction.

FTSE bulls also managed to produce a counter trend rally towards 6300/50 levels in the next few trading sessions, marked as potential Wave 2 on the chart here. Since then, the indice might be unfolding Wave 3 lower toward 5575 at least.

If the above proposed structure holds well, FTSE should ideally stay below 6350 mark and continue pushing lower from here. Also note that the short term trend line resistance is passing through 6100/60 zone. If prices reach there, the indice might face strong resistance.

Only a push through 6350 levels might be a concern for bears as the short term structure might change. A push below 5770 from here will confirm that bears are in control and FTSE might be dropping towards 5570 levels sooner than expected.

Traders might be poised to hold its short positions taken earlier and also add more around 6000/100 levels, with protective stop above 6350 and projected targets towards 5570 respectively.

Prepared by
Technical Analysis Team

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