Play for Monday, April 20th

Looking at the hourly chart, the FTSE saw a small divergence building on RSI and ROC during Friday's after-hours. The divergence is still small, and only on hourly charts, so we might get a small retrace down and a chance to jump in long on a support.

Previous resistance was around the 4020 to 4040 mark. We have the 200 weighted moving average at the 4000 mark. The current ascending trendline (see chart in the weekend wrap up), puts a last line of support at around 3980.

Although we might see this retrace down, keep in mind the upside momentum we had on Friday.


On the intraday 15 minute chart, note that an ambush long area is developing around the levels mentioned above. We have a 50% to 61.8% retrace (from Thursday's low to Friday's high) at around 4020 to 4040 area, and the 78.6% mark at 4000.


If momentum on the retrace down is quite strong, we might hover in the 4000 to 4040 area for a day or day and a half. However, as mentioned above and in light of Friday's strength, we might get a buy signal even above this area.

The profit target for a long entry would be between 4150 and 4200 (see weekend wrap up). Do take caution when if and when we approach the 4200 area.

Bottom line: I'll be looking for a confirmation to go long preferably between 4000 and 4040, but even above if necessary. Let's see how Asia pans out during the night as well.