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 warning signs appear
The FTSE has been trading within a rising wedge formation over the past week, with the price increasingly moving out of the pattern as we reach the apex. The strong selloff seen yesterday acted as a warning sign, with the close below 6400 notable. A rising wedge is a bearish pattern and thus there was always a good chance of a selloff on the break out.
This morning is seeing the price moving higher through 6400 resistance, yet the crucial question is whether a break through 6450 will occur to resume the uptrend. If not, this could be the beginning of a correction lower, should the price close below 6365. Support levels of note are at 6400, 6371 and 6365, with resistance at 6429, 6448 and 6460.