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Hugo in HTO Trading,

FTSE 100: Stalling at 2015 high

Since the beginning of the year the index gained in excess of 13.5% but last fell more than 0.5% and continues in a bullish phase since mid-September.

Last week the index went back and forward without any clear direction but managed to close in the red, in the middle of the weekly range, but closed within the previous week range, which suggests being clearly neutral, neither side is showing control.

The stochastic is showing an overbought market and is setting lower highs while price is making higher highs, signs of a potential bearish divergence.

Expecting a downward move to a key level at 6,565 (scenario 1) on a break below the previous week low at 6,891 although a bounce from the key level at 6,565 may push the index up to 6,810 previous weekly support turn into a weekly resistance  (scenario 2).