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FTSE – Corrections within bearish flag should provide fresh selling opportunities
Weekly: A sequence of weekly lower lows and highs has been posted. Levels close to the 61.8% pullback level of 7219 found buyers. Trading within a bearish channel and looking likely to test the previous swing low at 6847. Although conditions are oversold, pull-backs are expected to be limited to around 7219.
Daily: Price action looks to be forming a bearish flag formation which has a bias to break to the downside. This has a measured move target of 6523. The reaction higher from the 6922 low has been modest and has corrected the oversold conditions. Strong resistance above comes in around 7220-7250. Expect trading to remain mixed and volatile. We look to sell at current levels, on a rally and also after confirmation of the bearish flag.
Action: We look to sell at current levels (7020), on a rally at 7100 and on a break of 6980
Stop: Stop should be placed at 7300 initially
Targets: 6850, 6700 & 652...
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