- FTSE found support around 7100, a level dating back to late-2016
- As long as it holds and global markets don’t melt down again, should get a bounce
- Resistance arrives at area of former important support surrounding 7300
The slide in the FTSE was exacerbated by the decline in U.S. markets adding to an already shaky global backdrop. Selling pushed the footsie on 2/6 into a big line of support around 7100, a level which became important starting back in October 2016.
On Friday the market was sunk again into this level, but received help to start the week from a big reversal in U.S. markets on Friday during afterhours in London. The bounce again from around 7100 further solidifies it as an important one to hold if we are too see at the least a recovery bounce further take hold.
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FTSE Daily Chart
~7100 big area of support, ~7300 big area of resistance
From a trading standpoint, as long as support holds and we don’t see another global swoon then the bias is tilted in favor of the upside. It might take some time to put together a sizable rally as sentiment has taken a hit, and from a pure price standpoint, not far ahead surrounding 7300 there is pretty sizable resistance.
A breakout back above 7300 and hold of that level will be needed if the rally is to extend beyond just a quick bounce. On the downside, if the FTSE fails to soon garner buying interest and 7100 is cleanly undercut, then we’ll be looking for the sell-off to continue. There aren’t any no solid levels of support to speak of for a good distance down.
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---Written by Paul Robinson, Market Analyst
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