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(Z2) Gains Considered Corrective

GILT TECHS
  • RES 4: 105.34 High Sep 22
  • RES 3: 102.45 High Sep 23
  • RES 2: 100.92 High Oct 4 and a key resistance
  • RES 1: 97.65 20-day EMA
  • PRICE: 94.52 @ Close Oct 13
  • SUP 1: 90.99/90.38 Low Sep 28 and the bear trigger / Low Oct 12
  • SUP 2: 90.00 Psychological round number
  • SUP 3: 88.94 2.764 proj of the May 12 - Jun 16 - Aug 2 swing (cont)
  • SUP 4: 86.30 3.00 proj of the May 12 - Jun 16 - Aug 2 swing (cont)

Gilt futures pierced 90.99 on Wednesday, the Sep 28 low. Despite the subsequent recovery and volatile price action, the trend outlook remains bearish and short-term gains are considered corrective. Initial resistance to watch is at 97.65, the 20-day EMA. A break would suggest scope for a stronger corrective bounce and open 100.92, the Oct 4 high and key resistance. On the downside, 90.38, the Oct 12 low, is the bear trigger.

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