FTSE-100 : ROUNDING TOP- The market has been registering higher highs and low since mid-April ; the mid-term trend was then bullish.
- As stated in our previous analysis, the market has successfully accelerated to a new historical high around 8,483pts.
Since then, with continuing disappointing economic developments regarding inflation, PMI and retail sales data, investors have been pushed to take some profits out.
This led to this technical situation where the market seems to have come to a state of exhaustion, highlighted by a rounding top pattern.
Both moving average are in bearish configuration following a downside cross.
The MACD indicator evolves inside its selling zone too.
- The short-term outlook is bearish for the market.
The rounding top pattern is seen as a bearish reversal configuration, especially when it occurs far in a bullish trend, at an all-time high level.
The market has just broken-out the 23.6% fibonacci level at 8,310pts and its next targets can be found around 8,200pts, 8,117pts and 8,030pts by extension.
Pierre Veyret, Technical Analyst at activTrades
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