FTSE 100 (UKX) Reaches Overbought Region, May Resume Downward

FTSE 100 (UKX) Reaches Overbought Region, May Resume Downward


FTSE 100 (UKX) Medium-term Trend: Bullish
Resistance Level: 7500, 7600, 7700
Support Level: 7300, 7200, 7100

FTSE 100 (UKX) Long-term Trend: Bullish
FTSE 100 is in an upward move since November 2. The current uptrend has reached level 6400. It is currently retracing. It is unclear the extent of the downward move. The upward movement will resume if the downtrend ends.

UKX – Daily Chart

Daily Chart Indicators Reading:
The 21-day SMA and 50-day SMA are sloping downward indicating the downtrend. It indicates the current bearish trend. Presently, the share is at level 55 of the Relative Strength Index. The market is in an uptrend and above the centerline 50.

On the 4-hour chart, the share is in an upward move. However, the market is reaching the overbought region. On November 5 uptrend; a retraced candle body tested the 88.6% Fibonacci retracement level. This explains that the share is likely to reach level 1.1129 Fibonacci extension and reverse. It is not clear if the uptrend will continue.

UKX – 4 Hour Chart

4-hour Chart Indicators Reading
The share is above the 80% range of the daily stochastic. It indicates that the market is in the overbought region. The overbought region has been ongoing since November 2. The 21-day and 50-day SMAs are sloping upward.

General Outlook for FTSE 100 (UKX)
FTSE 100 (UKX) share is presently rising. However, the share is likely to reach bullish exhaustion at level 6000. According to the Fibonacci tool analysis, the market will reverse at level 1.272 extension or level 6072.


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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.