Mark Austin FTSE Trading Update - 28 Feb 2011

We finished Friday's session with the FTSE producing a negative outside week. A new high was made and the index closed lower than the previous week.  This is usually a strong sell signal however there are few other price action factors to bear in mind :


1) The index has already tested its lower trend line and major support at 5870 (and bounced on strong volume)
2) We filled a previous closing gap just under 5860
3) We closed Friday's session back over the 50 day day moving average and 6000
4) We are still in a bull market


Taking these points into account we have a sell signal but it is very weak.  We cannot conclude a top has been formed until we see an end of day close below 5820.

In the very short term whilst we await patiently for a clear trend to develop (for longer term trades) we will have to contend with sideways action.