FTSE 100 Waits for a Breakdown
|The FTSE 100 index in its 4-hour chart, shows a potential bearish trade setup. In this post, we review some factors of our short-side positioning.
1. The Elliott wave structure suggests that the British index could create a new bearish leg. Under that scenario, the FTSE 100 would likely visit its early October low of 7,004.25 pts.
2. The possibility of a decline gets supported by the "extreme greed" sentiment. Please note that this indicator doesn't provide an immediate reversal signal.
3. A short-side position should be triggered if the British index drops and closes below 7,300.2 pts. In the conservative scenario, the potential profit target is located at 7,244.35 pts. A downward extension could drive the FTSE to test the 7,197.5 and 7,135.95 pts.
4. The bearish setup will be invalid if FTSE pierces but doesn't close below 7,300.2 pts; or if the index climbs and closes over 7,365.7 pts.
Trading Plan Summary
Entry Level: 7,300.2 pts.
Protective Stop: 7,365.7 pts.
1st Profit Target: 7,244.35 pts.
2nd Profit Target: 7,197.5 pts.
3rd Profit Target: 7,135.95 pts.
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