The passing week was very dull in its range, and closed as an inside Weekly pinbar, above the sloping 8 EMA short term sentiment line, a quite bullish picture on the Weekly. Pay attention that taking out the last week’s High is a bullish signal, but since the Weekly bar is an inside bar, it is much less reliable.
In my last review, I mentioned that a possible false thrust down below the previous Friday’s Low is a good bullish opportunity. Last Monday was far from being a bullish pinbar, and closed rather bearish on the Daily 20 SMA. On the next Daily bar, Tuesday, on the mid day, the market has already made a HH and was about to print a bullish engulfing pattern, but eventually closed weak. This is a good example of the need to wait for a possible emerging signal bar in the relevant timeframe – to end first, and not to conclude things before the market does actually prove by printing them on the chart when closing the bar.
The current Weekly bullish setup still points to 7250, while the correct stop is currently below the Low of Monday September 29th, at 6710.28, not a good level to join the move as of Risk-Reward ratio. The other important signal is the Monthly bullish pinbar of last June, pointing at 7220 as a target.
Pay attention that the Monthly 20 SMA has been crossing the 50 SMA downward, not a long term bullish sign, but remember the scale – Monthly, so it would take at least one more month to validate, and months to see the true effect.
Again, a lower timeframe signal to join this move might come by having a Daily bar of false thrust down, preferably below the Weekly Low at 6930.04 (taking out only the Low of the inner Weekly bar is good also), – followed by an immediate thrust up above its High the day after.
FTSE Futures, Weekly and Monthly charts (at the courtesy of prorealtime.com)
Disclaimer: Anyone who takes action by this article does it at his own risk and understanding, and the writer won’t have any liability for any damages caused by this action.