You would expect the beginnings of some stabilisation in the FTSE 250 stocks sooner rather than later, unless sentiment has really turned. Notice in the chart the horizontal lines showing the move in the index from the March 5th low to the May 8th peak. A 50% pullback on this move takes it back to 1151, so at the current 1149 we are hovering just under this 50% line.

Markets often retrace to what are known as Fibonacci levels, typically drawn at 25%, 38%, 50%, 62% & 75%. A violation of these levels on strong volume can point to more serious things going on underneath the surface.

In this case, what we are seeing is a mini shift away from small & mid caps into the larger caps which has been much anticipated.

This entry was posted on Thursday, June 7th, 2007 at 4:45 pm and is filed under Main. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.