FTSE might have carved a potential lower high around the 6300 mark, and is holding well below that mark for now. Bears might be looking to take control back from around 6100/6200 mark, and proceed lower towards 5575 over the next few trading sessions.
FTSE probable wave structure is as follows: The indice might have carved a meaningful top around the 6500 mark around June 08, 2020. Since then, bears have held prices lower and carved a series of lower lows and lower highs through 5850 levels.
The drop between 6500/10 and 5931 was an impulse, which sub-divided into 5 waves, marked as Wave 1 on the chart here. An impulse wave is ideally followed by a corrective structure. The subsequent price action towards 6333 was corrective Wave 2.
Also note the corrective wave had managed to reach just above the fibonacci 0.618 retracement of Wave 1. If the above structure holds well, prices should ideally stay below 6333 and continue drifting lower towards 5500 and beyond.
Alternately, if FTSE was to produce a complex corrective structure it could rally towards 6350/6400 mark before finding resistance. Ideally, the indice should hold below 6500/10 levels to keep the immediate bearish structure intact.
Traders might be preparing to initiate fresh short positions on counter trend rallies through 6100/6300 levels going forward. The protective stops might be placed above 6600 mark for now and projected targets would point below 5500 mark.
Technical Analysis Team
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