In previous analysis dedicated to the Ftse Mib, we highlighted three bullish channels, from a short, medium and long term perspective.
In particular, we underlined how important it was to monitor them to detect any signs of reversal.
Yesterday, thanks to some international factors, attributable above all to the fear of an early tapering by the FED, rather than in Afghanistan, we witnessed the breaking of the short-term channel.
Not only. The dynamics of prices also confirmed a bearish pattern of Magic Box, which allows at least some short-term projections, except for an extension of the downside, which will be evaluated in the event of a breakdown of some levels.
We then update the technical situation as follows.
Ftse Mib: bullish channel break and projections
So let’s proceed starting from the analysis of the following graph.
The yellow semicircle represents a medium-term cycle, divided into four sub-cycles with black vertical lines.
The graph also shows three channels, taken from the previous analysis.
In light blue the short-term channel broken downwards, in green the medium channel, in yellow a long-term channel.
Magic Box projections and cyclical analysis
As we have already said above, the decline has also confirmed a bearish pattern of the Magic Box, which allows the following projections.
Without excluding a future widening of the downside, the first target is located in the area of 25,670, indicated by the highest horizontal black line, and a second target in bearish overshooting sees area 25,180, as the maximum extension of the short-term downside, objective represented by the black horizontal line lower.
The target should be reached for / by the August 30 time setup, indicated by the red vertical line.
First sign of a bullish recovery, possibly without reaching one of the targets, only if the black descending line is exceeded. The latter represents a dynamic level, outlined with the Magic Box method.
It should also be noted that just beyond the red vertical line there is a black vertical line, which indicates the middle of the cycle and the passage from the second to the third sub-cycle.
The Magic Box projections, indicated above, indicate that prices, therefore, should not fall below the minimum of the beginning of the second sub-cycle, at least by its closing, given the proximity between the setup of 30 August and the beginning of the third sub-cycle for the first few days. September.
Not only. The levels relating to the projected targets remain within the medium and long-term channels. If, therefore, these projections are true, the medium and long-term bullish trends would remain intact, but at the moment this indication is premature.
A confirmation from the square of 90
The indication of the August 30 setup is also confirmed by other techniques, in particular attributable to Gann’s methods.
For example below is the graph of a so-called square of 90.
To end on Ftse Mib and break of the bullish channel and projections, the red arrow highlights a green vertical line, which indicates, in fact, the setup of August 30, already projected by Magic Box.
The care of Gian Piero Turletti, author of “Magic Box” e “PLT“
