4-hr UK100: A Healthy Correction Might Attract More BuyersThe UK100 is experiencing a remarkable rally! Over the past few weeks, the British stock market index has surged nearly 800 points. Each minor dip has attracted more buyers, fueling the bullish momentum. However, since last week, we’ve observed a slight slowdown, an uptick in selling volume, and a decline in the 20-period moving average.
Despite this, the broader trend remains bullish, as confirmed by the Golden Cross—a widely recognized buy signal. While we favor long positions, we aim to optimize our risk-to-reward ratio. To achieve this, we prefer to wait for a deeper pullback before entering. Ideally, we’d like to see the price retrace toward or below 8,640, which coincides with the 23% Fibonacci retracement.
While market corrections often reach the 38% Fibonacci level, the strong demand for UK100 suggests that a shallower pullback might be sufficient. For this reason, we target the higher retracement zone as a potential entry point. Our preferred exit would be above 8,820, where a Double Top chart pattern is expected to form. This strategy ensures a well-timed entry while aligning with the dominant uptrend.
