FTSE: still showing overbought on the daily charts

FTSE

We have been contained this week..maybe the market is consolidating the recent move higher so far this month to 7422...and it needs a break...Still showing overbought on the daily charts, s there is still a case for the sellers to come into the market at higher levels...

However, the more we consolidate in this range there is greater chance of easing the overbought conditions and then once the market has eased this a bit I would expect the buyers to come back in...Even when we have traded lower this past week we have not traded very far on the downside and 7336 which was our target has been reached..So I think today we might see traders clearing their books for the weekend...so it could be a bit thin and whippy..

Now usually when we see a move higher and then consolidation we look at it as a continuation pattern, where the market pauses for breath before resuming the previous little trend...and this was up this month...however you have to be aware of the overhead resistance at 7434, and given we are so overbought it is unlikely we can bust through this resistance and stay above it, especially as it is Friday...

I never say never however...Todays DP is @ 7276...So this is going to sway traders which way to go today...As we have not been trending this week, I think to stay within the recent trading parameters of 7336 to 7408 is a good idea using 7376 then as a directional clue to where we go intra day...Ties this in with chart levels and Fib levels and you will see that even yesterday the med term 61,8 @ 7358 held the downside....so look at these and use them in trading.