Technical Analyst, Saxo Bank
Summary: FTSE 100 and FTSE 250 Mid-Cap Indices holding on above key supports. FTSE 250 Shoulder-Head-Shoulder top and reversal pattern on the verge of being confirmed.
UK100 cfd and UK25MID cfd levels
UK100 cfd reached the 2.00 projection of the January correction at 8,045 forming Doji candle. The UK100 cfd seems ripe for a correction having shown divergence on RSI for weeks but RSI is still showing positive sentiment.
If UK100 breaks below support at 7,848 a swift move to next support at around 7,700 should be expected.
If UK100 closes back above lower rising trendline new highs are likely.
FTSE 250 seems stuck between 19,938 and 19,574. The latter is the Neckline in what could be a Shoulder-Head-Shoulder pattern. The SHS pattern is confirmed if FTSE 250 closes below the Neckline support at 19,574. If that occurs there is potential down to strong support at around 18,450, illustrated by the two vertical arrows.
To demolish this SHS pattern a close above right shoulder i.e., above 20,324. If that scenario plays out FTSE 250 is likely to take out February peak at 20,615.
UK250MID cfd levels: Range bound 20,000-19,529 (Neckline) Break below Neckline paves the way towards 19,500. To demolish this SHS pattern a close above right shoulder i.e., above 20,278. If that scenario plays out UK250MID is likely to take out February peak at 20,582.
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