Ominous signs are gathering for the FTSE 250, says Sejul Gokal, Chief Technical Strategist at GO-TechniKAL Insight.

Gokal notes that several topping candlesticks have appeared at the 76.4% Fibonacci retracement level and mid-Pitchfork line (see Chart 1). Additionally, he points out that internal strength is weakening: the latest peak in the FTSE 250 was unconfirmed by market breadth indicators (e.g. the number of stocks above their 20-day moving average) and stock level participation (as measured by the Advance-Decline line) is falling (see Chart 2).

Gokal says a reversal for the FTSE 250 may also be bearish for Cable. The correlation between GBPUSD and the FTSE 250 is at 0.63, its highest since Brexit day (see Chart 3).

See Chart 1 / Chart 2 / Chart 3.