The FTSE 100 has started the year in a bearish manner having lost the 6,000 points’ level on the back of the market uncertainty fuelled by the situation in the Asian markets. The global stock markets in general have been under pressure as the new year has begun with doubts on whether the global slowdown will continue and if it’s possible to become worse.
The point is that the FTSE has been under pressure and just last week the index hit a fresh low around the 5,750 points’ area. The issue here is that apart from the broader fundamental environment that I detailed above the London index is not receiving any support from the domestic market either. The economy in the UK has been fairing ok in general over the recent months but nothing too exciting to help the FTSE to remain afloat.
As such I remain sceptical over the index’s outlook and as long as the FTSE keeps trading below the 6,000 points’ resistance we cannot be talking about a major correction rally to bring the index back to its recent 2015 levels. This week I am going to focus my attention in the 5,850 points’ level as I consider it to be the important pivot level for the short term outlook of the index.
At the moment I am looking at the index trying to overcome this level and attempting to mount a correction attempt towards the 6,000 points’ highs. I don’t expect too much volatility this week so if the FTSE manages to remain above this key pivot level then I will look to hunt some short-term profits towards the 6,000 points’ resistance. On the opposite scenario, a failure to remain above the 5,850 points’ pivot will inevitably drive the FTSE back down to its 5,750 points’ lows.
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