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 selling off from key resistance
Yesterday finally saw the FTSE 100 sell off through 5768 support (August 2015 low), which represents the biggest support level in the past six months. This break is absolutely crucial as there are few major support levels beneath it, hence the strength of yesterday’s move lower.
Overnight the FTSE has pulled back up to that crucial level and posted a gravestone doji prior to selling off once more. Given the continuous/gapless nature of these charts, this means a form of evening star reversal is being created, providing a renewed bearish outlook.
With all this in mind, the bearish view remains in place, where yesterday’s low of 5600 (November 2012 low) represents the main hurdle to get through for the day.
A closed hourly candle back above 5768 would be required for this bearish view to turn more bullish for the short-term.