As anticipated the FTSE has had its correction during October, bottoming out at 5130 and now rallying to 5236, with the last close at 5213. The question is, has the bottom been made or not ?.
Its a tough call, but we are now moving into a strong up seasonal period that should see the FTSE rally strongly into December 2006, and on that basis it is highly probable that the bottom has already been put in at 5130 !

Technical Analysis
1. Support - At the last low of 5130 and 5115 previous peak..
2. MACD - (Bottom indicator) - So still favouring the bull trend by making a higher high and low, so suggests a bounce off the current uptrend line, i.e. a resumption of the bull market.
3. 40 week Moving Average - The price decline bounced before hitting the 40 week average, i.e. very similar to what happened during the last correction.
4. Uptrend Line - The uptrend line is still some distance from recent price action so suggests that the FTSE could still fall towards it at around 5000.

Buy Trigger - The Primary buy trigger would be to break the most recent intraday high at 5237.
Stop Loss - A good stop loss to accompany the buy trigger would be below the recent low or at 5130..
Target - The Uptrend along the high projects to 5650 by end Dec 05, or about 440 on current prices, A safer high target would be 5590, as the FTSE may hit resistance at 5600. The low target would be using the mid channel extended to Dec 05. the low target would be the prev peak or 5520.

Nadeem Walayat

(c) MarketOracle.co.uk 2005
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