What’s inside:
- The FTSE finds support at ‘Brexit’ trend-line and…
- Support at later summer peaks
- Trend is up as long as support holds
The last time we were discussing the FTSE 100 it was trading right around record levels, but has since pulled back. The decline took the UK index back to a solid level area of support formed by the late summer peaks, and roughly around the neckline of the inverse head-and-shoulders the index launched out of in the beginning of the month.
Yesterday, the FTSE broke below a month-long trend-line, but held up on the back of previously mentioned support. More importantly the market is turning higher from a trend-line extending higher from around the time of the ‘Brexit’ vote (it’s a tough draw for the purist using only highs/lows as connecting points, but using closing/opening prices only it matches up with yesterday’s close almost to the pound).
In any event, recent trading activity is putting a lot of importance around the 6930 area. From a trend perspective, the market remains generally pointed higher. A break below recent lows and trend-lines would be required before a possible trend change could be considered. So as long as there is no breakdown, our bias will remain in the tentatively bullish camp. Two recent failures around record highs created in April 2015 will put an air of caution on an advance back above 7100.
FTSE 100: Daily
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---Written by Paul Robinson, Market Analyst
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