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.

Trade with
Abans Global

• Authorised and Regulated by FCA
• Customer Support 24/5
• Low Spread & Commission
• Instant Execution
• No Dealing Desk