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;">www.cfionline.it</span>)</em>
Starting 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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