FTSE: strong resistance at 4.7k!

FTSE 100 (8599) Near term trend: Down Form the Oct low (3665) the index has gained over 27% in a mostly likely 'corrective' rally within the structural bear market. Last weeks high of 4675 is almost there on 0.50% retracement level (4650)of entire fall from 5649 to 3665, i.e. last segment of the preceding fall. Historically bear markets rallies do correct 50% of the fall, in a counter trend. Is it means the corrective uptrend in FTSE is likely to terminate here? Yes, the odds are very high (for a reversal). As long as the index is trading below 4650, say 4.7k, resumption of bearish trend is likely. On the downside we need weekly close below 4.2k, as a confirmation & then expect 3.8k or even a new low within next few days/weeks. If this argument is wrong then we will see firm up move till 4980.

Failed to suprass 4325! New low?

FTSE 100(3999) Near term trend: Negative

In the last review, I have argued in favor of 'corrective rally' saying that " the recent fall from 4.6k is a part of overall "recovery" attempts rather than fresh fall; On the upside close above 4375 is required to add strength in the recovery attempt; whereas stop is placed near 0.618% fib level".

However, today's break of 0.618% retracement level is "significant" development and has jeopardize the interest of bulls, completely. On the weekly charts, the lower end of the parallel channel is the next price level to watch i.e. 3.6k. Whereas on the daily charts, the expanding shape will continue to have negative implication for the index, as long as it remains below 4.3k. In short the "trend" is still down in absence of 1) Trading above crucial level of 4325 2) Break of 0.618% Fib level. On the downside I am open for 'anything' in the medium term & 3.6k in the extreme short term, provided we remain below 4.3k.

Corrective rally is on...

FTSE 100(4169) Near term trend: Positive

After creating "double top" bearish formation at 6150 in Oct 07, FTSE tanked more than 45% in "global equity meltdown". Two weeks back the index recovered "exactly" from the lower end of the "equi-distance" parallel channel, thereby providing excellent opportunity for the bulls to fight back.

Since then i.e. from low of 3665(27th Oct), FTSE has gained over 26% with a high of 4639, before correcting downward. However this down move is likely to be a part of overall "recover" atttempts rather than fresh "fall". This bullish argument is also "in line" with overall bullish view discribed under "World index" analysis. On the daily chart, FTSE has formed suspected "expanding" triangle formation and the last leg is likely to end anytime, may be near 4k. On the upside "close" above 4375 will add much require strength in the medium term uptrend, eying 4.6-4.8k in the next few weeks, or may be by year end. Stop 4k.