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Technical Update - FTSE 100 still looking strong. FTSE 250 struggling
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: FTSE 100 broke all time highs. Uptrend likely to be extended but minor correction should be expected
FTSE 250 struggling for further upside momentum and a reversal could be seen
FTSE 100 has reached 2.00 projection of the minor January correction at 8,040. With divergence on RSI a minor correction should be expected. First indication of that scenario to unfold would be a close below lower rising trendline. For a larger correction or trend reversal a close below 7,710 is needed. Until that scenario plays out the uptrend is intact where FTSE 100 can extend uptrend to the 1.618 projection of Q3 2022 correction at around 8,117 possibly 8,245 i.e., the 1.764 projection– see weekly chart.
However, as indicated on the weekly chart there is potential up to 8,450 with the two horizontal arrows. They illustrated the potential target/trading range if the range from 2021 till Q1 2023 is shifted upwards.
However, as indicated on the weekly chart there is potential up to 8,450 with the two horizontal arrows. They illustrated the potential target/trading range if the range from 2021 till Q1 2023 is shifted upwards.
FTSE 250 hovering around lower rising trendline and the 20K mark. A close below 19,938 could signal a reversal of the uptrend with support at around 19,574 and 19,317, where the 100 and 200 Moving Averages will provide support.
If FTSE 250 can close above previous peak at 20,547 the uptrend is set to be extended with room up to next resistance at around 21,485.
RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend
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