FTSE support / resistance

by Malcolm Pryor on 16/11/2012
The attached chart of FTSE has a couple of horizontal lines on it which I have been discussing on Twitter a lot this week. The higher line at 5715 was at one point potential support (half way up the big candle of September 6, coinciding with a couple of days with small real bodies and huge lower tails). However that support, now broken, is likely to act as resistance should price return to that level. The lower line at 5635 is where all the action is likely to be on Monday. It is the low of the swing low which occurred in early September, and is a logical place for bulls to regain some control if they are going to. Price closed well below that line on Friday, however in after hours trading price was pushed right up to that line. Any bears that took a short position during Friday and still have it are going to have an uncomfortable weekend following the end of day rally in US markets. If 5635 holds on Monday we might see some short covering.


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