Play for Friday, May 22nd

Yesterday afterhours the FTSE reached as low as the 4310s, and it's now quoted in the 4340s.

Today, and also once we open again on Tuesday, I'll be looking to add to short positions if long term momentum is maintained.

I updated the trendline chart just below, and as you can see we have respected the neckline of the double top and we are still within the ascending channel.


We could find some strength at the levels we are at, and possibly retest the middle of the double top between today and when we come back on Tuesday. Ideally, I'd be looking to add below or at the 4440s: another touch of the 4500 level would be quite bullish.


We have the following bearish arguments on the table:

• Double top formation which requires a confirmation.
• Negative momentum on all long term time frames, intraday and daily.
• Daily and weekly RSI had both reached overbought conditions.
• Negative divergence on both daily and many longer term intraday time frames: see the 8 hour chart below.

Still, we need to penetrate the neckline of this double to complete the bearish picture.