August 3, 2022
  • August 3, 2022

Finds massive 50-day EMA buys

By on May 14, 2021 0

Seeking the opportunity to build a longer term position

The FTSE 100 fell significantly during Thursday’s trading session to hit the 1600 level. This is where we broke out previously, and the top of the ascending triangle that I marked on the chart. The fact that we have come back to retest this area and hold is a very bullish sign, and it suggests that the FTSE 100 should continue to move much higher. At this point we have formed a hammer which has been followed by an even bigger hammer, and as a result there is a very nice bullish sign. On top of everything else, the 50-day EMA has taken place, which also looks great.

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Looking at the alternate scenario, we could in theory break down below the low of this candlestick which I think would be an extremely negative sign. At the moment I would anticipate a step up to the 6600 level, which also has the 200-day EMA approaching quite quickly. If that happens it could be a very negative sign overall, but I don’t think it looks very likely after the massive intraday move.

A break above the 7000 level opens up the possibility of a move towards 7200, which has been a target of mine for some time. Additionally, there is a void above that has yet to be filled, so you can consider it a potential target as well. Remember, the stock markets continue to rally based on liquidity more than anything else, so there’s no reason to get too cute here and try to trade against what has been a huge uptrend not just in the FTSE, but also in DAX, S&P 500 and NASDAQ.

If we can break through the 7200 level then it is likely that we would move towards the 7500 level based on a longer term extension of the trend. That doesn’t necessarily mean we’ll get there anytime soon, it would just be a longer-term goal. At this point I am looking for the opportunity to build a longer term position, slowly entering and adding as we continue to see upward momentum as it looks like a huge move just begging to happen . I have no interest in bypassing, at least not until we drop below that 200-day EMA.

FTSE 100