FTSE 100 Daily Chart. Bullish Breakout
Updated
The FTSE 100 has shown a bullish break out from a descending (bearish) channel that began in July 2018. It has also crossed the middle Bollinger band.
However, it has not taken the 50 day EMA even though it is inside the Bollinger bands. All moving averages inside the Bollinger bands have to be taken for it to be truly bullish or bearish once a trendline is broken.
Although a bullish break out from a descending channel is indicative of a potential change in the market trend, I would advise that we exercise caution. My reason, is that the 50 day EMA is a resistance that needs to be broken as long as it is within the Bollinger bands.
Secondly, the most recent failed attempt at the upper trend line which stands at 6908.5 needs to be taken or broken by the upward price action. This s currently very close to the 50 day EMA.
Conclusion: This bullish action that we are currently experiencing can only be confirmed if the price action breaks upwards through 6908.5. I will remain in my short position until these criteria are met.
However, it has not taken the 50 day EMA even though it is inside the Bollinger bands. All moving averages inside the Bollinger bands have to be taken for it to be truly bullish or bearish once a trendline is broken.
Although a bullish break out from a descending channel is indicative of a potential change in the market trend, I would advise that we exercise caution. My reason, is that the 50 day EMA is a resistance that needs to be broken as long as it is within the Bollinger bands.
Secondly, the most recent failed attempt at the upper trend line which stands at 6908.5 needs to be taken or broken by the upward price action. This s currently very close to the 50 day EMA.
Conclusion: This bullish action that we are currently experiencing can only be confirmed if the price action breaks upwards through 6908.5. I will remain in my short position until these criteria are met.
Note
Another requirement is that the Bollinger bands need to start expanding or at least, the upper band should start turning upwards as expected in a bullish action instead of being horizontal. Just two robust upwards price movements is enough to do this.Note
Most importantly, the most recent prior high point where the price action collided with the Bollinger Band is 7145.5 on Dec 03, 2018. Once this is exceeded, the price action becomes truly bullish and fully confirmed.
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