Technical analysis FTSEMib: two hypotheses


Starting from the objectivity of the facts, it is appropriate to make two hypotheses that are helpful in clarifying the current lateral phase of the Italian market and possible developments  </p><div>

            <! - <EdIndex> -><p><strong>By Fabio Pioli, </strong><em>professional trader and founder of CFI Independent Financial Consultancy (<span style="text-decoration: underline;"></span>)</em>

graphic-quotes-bagStarting from the most important evidence, one cannot help but notice how the prices of the future on the Italian FTSEMib 40 index have been included, for 50 stock exchange days, in two lateral ones: a larger one, ranging from 14,000 to 18,200 points and a narrower one, between 16,000 and 18,000 points (Figure 1).


Fig 1. FTSEMib futures – Daily chart

We always highlight the importance of the sides because they are part of the way the markets move: at their basis there are processes of accumulation or distribution which will substantiate themselves in price variations. More precisely, the longer a lateral (and this is longer) the stronger the subsequent variation.

Being that no evidence has been given of a bull market, here are the two most reliable hypotheses:

1) the rebound will continue to find resistances greater than 18,200 points (Figure 2)


Fig 2. Future FTSEMib – Daily chart

2) the rebound is already over and the new bearish movement will start immediately and will break the 14,000 points (Figure 3)


Fig 3. Future FTSEMib – Daily chart

Why don’t we talk about a third, bullish, hypothesis and limit ourselves to the two bearish ones, one wonders.

It can never be excluded that we can turn upwards, but for now it is useless to practice or foresee bullish actions given that the bull market is not.

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The author communicates that this presentation presents information that could potentially implicitly or explicitly suggest an investment strategy regarding one or more financial instruments and opinions on the current or future value or price of these instruments and is intended as a marketing communication. As such it does not represent research prepared in accordance with the legal requirements to promote the independence of investment research and is not subject to any prohibition prohibiting negotiations by analysts and relevant persons prior to the dissemination of the research in investment matters.

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