Bearish signals in each of the last two days have been confirmed, investors selling FTSE 100 futures on Wednesday to post a 3rd lower daily high and low in a row and a loss of 50 Pts on the day. Although this is negative, the pullback is also signalled as being potentially temporary and improving sentiment into the close has come from almost exactly a 50% pullback to the April-May gains, at the same time forming a bullish daily Hammer.
This changes Thursday’s outlook to positive, but until a sequence of lower daily highs is ended the call is cautious and is to buy on the open and at 6685.0, with a stop loss at 6667.0, yesterday’s low. Targets are to 6718.5, yesterday’s high, 6730.0, a 50% recovery to the losses posted since Friday’s high and then to 6777.0, Tuesday’s top.
