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Hugo in HTO Trading,

FTSE 100: Inverted head and shoulders pattern

Since the beginning of the year the index gained in excess of 9.0% and last week only rose more than 0.5% but is still in a bullish phase since the end of June.

Last week the index rose with a narrow range but closed near the high of the week, however closed within the previous week range, which suggests being slightly on the bullish side of neutral.

The stochastic is showing an extreme overbought market and is displaying a weak bullish momentum.

Expecting an upward move to a weekly resistance at 6,906 (scenario 1) on a break above the previous week high at 6,684 however a break below the previous week low at 6,605 could drag the index down to the 200-week moving average at 6,416 (scenario 2).