This is the FTSE Monthly chart, which gives us reason for optimism. We are still recovering from a dreadful January and after some relative stability in Feb, we got the jitters again earlier this month. You can also see here that our old friend the 38.2 FibonacciRetracement level is being vigorously defended each time we take a look down. You will also notice the big pick up in volume when we visit lower levels; this is also very important and encouraging
Indicators in Play
Volumes are a very important factor in Technical Analysis. When we have a reversal signal such as a Hammer or even a Spinning Top, the likelihood of this being a successful reversal is greatly increased if this is supported by high volume.
Summary
We are very encouraged here and will be dipping our toe to the long side. We have to be vigilant because we are still vulnerable to adverse news. We would be getting far more confident once we have re established ourselves above 5800 with 6090 the longer-term test. .
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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