FTSE bears continue to remain in control and might have managed to carve a potential lower high around 6100 mark. The indice is trading 5957 for now and bears might be inclined to push below 5750 in the near term. A break there would confirm that a meaningful lower top is in place.
FTSE Probable wave counts are as follows: The drop from 6500 through 5931 was sub-divided into 5 waves, making an impulse Wave 1 on the chart here. Ideally an impulse should be followed by a corrective wave in the opposite direction.
FTSE bulls managed to carve a corrective wave through 6350 levels marked as a-b-c Wave 2 on the chart here. Also note that the indice had exceeded fibonacci 0.618 retracement of the earlier drop between 6500 and 5931 respectively.
If the above structure holds well, FTSE should ideally stay below 6350 levels as Wave 3 progresses. Also note that the indice is in the sell zone of the recent resistance trend line passing through 6500 and 6300 respectively.
Until prices stay within the sell zone of the immediate resistance line and also below 6300 mark, bears are expected to remain in control and push prices towards 5575 in the near term. A slip below 5750 should be encouraging to bears, going forward.
Traders might remain inclined to hold short positions taken earlier and also add more if prices reach 6100 resistance levels. The protective stop might be placed above 6500 levels and projected targets below 4700 in the next several weeks.
Technical Analysis Team
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