After a relatively quiet first part of the previous week the FTSE made it higher on Friday, reaching the 6,950 points’ area which is pretty impressive if you take into account that investors had little news to be excited about.
I have been talking to a lot of traders and investors the past weeks and most of them keep repeating to me more or less the same thing: the FTSE can’t sustain these levels and at some point it needs to correct lower. I am inclined to agree at this point and the main reason is the way that the London index has started this week earlier today.
A sharp decline off the recent highs that brought the index back into familiar territory just below the 6,900 points. This looks to me as if the radical climb on Friday was just a fake-break and the real momentum is towards the downside. I wouldn’t go as far as betting on it right now but I would be very interested to do so if the 6,850-60 area gets breached.
In my opinion the pivot point for the days ahead lies there, I consider the 6,850 to 6,900 points’ range as a no-man’s land and I would only look into trading the FTSE to the downside when it breaks below the 6,850 support level. My target for this week is located around the 6,800 points floor.
However we should not get ahead of ourselves though as there could be fresh news from the Greek debt negotiations and the FTSE 100 can see some volatility on the back of it. So to sum it up I am looking for a good opportunity to short the index below the aforementioned pivot level while keeping an eye on any news from the Greek issue.
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