FTSE 100 Price Outlook: Test of ’The’ Bull Market T-line May Come Soon
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FTSE 100 Technical Highlights:
- FTSE looking to test 2009 trend-line soon
- Market on the verge of breaking support levels
For our analysts intermediate-term fundamental and technical view on the FTSE and other major indices, check out the Q3 Global Equity Markets Forecast.
FTSE 100 looking to test 2009 trend-line soon
During the recent bounce in major global indices the FTSE, along with the DAX, was a laggard, which is it is no surprise that the index is already heading towards a test of the June low. Recently, the 200-day along with some price support was enough to keep a bid in until yesterday.
The June low is the last of support until a bit of open space opens up to the trend-line off the bear-market low in 2009. This would of course make for another important test of the long-term trend. The first test came in December and due to its success, each successive test (maybe soon) will become increasingly important to pass.
If the market eventually breaks it, it doesn’t necessarily a major bear market will ensue, but it does certainly elevate the risk of that being the case. For right now, from a tactical standpoint existing shorts may want to continue to see how much selling pressure can come in, using bullish price action as a potential exit signal.
While existing longs may be prudent to tread carefully here until positive price behavior becomes apparent, ideally around support. New positioning is tricky at the moment for either side. For shorts, support is support until its not and could induce a bounce at any time, and for longs buying into the teeth of a decline can be a difficult endeavor.
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FTSE Daily Chart (watch June low)
FTSE Weekly Chart (Bull market trend-line)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.