Play for Wednesday, April 22nd

Yesterday's upward retrace has shed light on the following:

• We have gone back, although slightly, into the ascending channel we had left ealier. However, as of now (7 AM UK Time), we are standing right on the lower boundary, with the FTSE quote in the 3990s on the bid.
  
• Momentum on daily indicators is still slightly negative for now.
• Intraday indicators are mixed.

I would like to shed light on this potential formation that's taking shape: an almost slanted head and shoulders that would need to fail today or tomorrow at or below the right shoulder. Given the still negative daily momentum this is something to be aware of.


On the 15 minute chart that follows, please note how we closed last night at a major retrace area from Friday's high to yesterday's low, in the 4010s to 4030s, and which I noted in yesterday's evening wrapper.



I'll be looking for any sustained weakness at the open: if the short trend continues I will try to get in. The 4010s to 4030s are an area of interest as mentioned. However, I'll be very open minded and will be on the look out for any strong support area forming: there are several support lines on the way down, and the main long ambush area is in the 3950s to 3970s.

Today is my last day of trading for this week, and I won't be looking at the markets from tomorrow until Monday evening. I'll be again trading cautiously for this reason, unless a great opportunity comes about.