This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
FTSE breaks lower, yet forms bullish falling wedge
Yesterday saw the FTSE breaking below the lower end of the symmetrical triangle that has been in play over the past month. However, as ever the most important thing is to create a new low, which would mean a move below 6489, which did not happen. Thus while we did get a relatively bullish indicator by breaking the ascending trendline, we remain in a place where higher lows are in place.
The price has very recently started forming a falling wedge formation, which when seen in a downtrend is generally countertrend. That means it is a bullish indicator and would more often than not result in a move out of the top. However, until that happens it could be prudent to expect the wedge to remain in play, and thus a short-term move lower seems likely.
Ultimately for me to see an indication of a major move in either direction, I would need to see a break below 6489 or above 6602.