Hi Traders! UK100 technical analysis and forecast is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available!
On the H4 chart we have a strong resistance that has formed and the price which was moving higher has broken above this strong resistance zone. Currently this strong resistance zone is acting as a strong support zone for us. The price which was moving lower reached this support zone, and is currently bouncing higher from this zone. We also have a bullish hidden divergence that has formed between the first low that has formed at 6828.60 and the second low that has formed at 6881 based on the MACD indicator which we may consider as evidence of bullish pressure. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as another evidence of bullish pressure. We may now move down to one more timeframe lower and look for evidences supporting this bullish view.
Looking at the H1 chart we have a bullish divergence that has formed between the first low that has formed at 6898 and the second low that has formed at 6881 based on the MACD indicator, which we may consider as evidence of bullish pressure. Also based on the Parabolic Sar we could see that the dots are below the price which we may consider as another evidence of bullish pressure. In addition to this we have a downtrend line breakout based on the CCI indicator which we may consider as yet another evidence of bullish pressure. So the bottom line here is that the H1 chart has evidences supporting this bullish view. We may now move down to one more timeframe lower and look for evidences supporting this bullish view.
On the M15 chart we have a bullish divergence that has formed between the first low that has formed at 6898.30 and the second low that has formed at 6881 based on the MACD indicator. Then the price moved higher and broke above the high at 6962.75 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently it looks like a correction is happening. Also the ADX indicator gave a bullish signal at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as another evidence of bullish pressure. Until the strong support zone shown in the image below holds my view remains bullish here and I expect the price to move higher further in the short term.
UK100 H4(4 Hours) Chart Analysis
UK100 H1(1 Hour) Chart Analysis
UK100 M15 Chart Analysis
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
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