FTSE 100 Waits for a Breakdown

EagleFX Team EagleFX

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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Author

EagleFX Team

EagleFX

EagleFX Team is an international group of market analysts with skills in fundamental and technical analysis, applying several methods to assess the state and likelihood of price movements on Forex, Commodities, Indices, Metals and

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