Britain’s Conservative Party has lost its parliamentary majority, which may complicate Brexit
According to the election results on June 8, 2017, the Conservative Party of Great Britain has lost its majority in Parliament, initiated by the Prime Minister and Conservative Party leader Theresa May. Some investors believe that this will complicate the procedure of Brexit. Will FTSE 100 Index prices fall?
On the daily timeframe, GB100: D1 continues to be in a rising trend. Over the past 12 months, it has increased by 27%. A downward correction is possible in case of the worsening of macroeconomic and corporate indicators of Great Britain.
- The Parabolic indicator gives a bearish signal.
- The Bollinger bands have narrowed, which indicates low volatility.
- The RSI Indicator is above 50. It has formed a negative divergence.
- The MACD Indicator gives a bearish signal.
The bearish momentum may develop in case GB100 falls below the last fractal low coinciding with the date of the last parliamentary elections at 7440. This level may serve as an entry point. The initial stop-loss may be placed above the last fractal high, the historic maximum, the Parabolic signal and the upper Bollinger band at 7640. After opening the pending order, we shall move the stop to the next fractal high following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop level 7640 without reaching the order at 7440, we recommend cancelling the position: the market sustains internal changes that were not taken into account.
Summary of technical analysis:
| Position | Sell |
| Sell stop | Below 7440 |
| Stop loss | Above 7640 |