The FTSE 100 is at a crossroads and my tactic for this week is to hunt for the breakout

This morning the FTSE 100 is trading just shy of the 6,900 points having declined heavily last week and now the question is whether the future is lying higher or lower. Last week we saw a great correction from the London index that came off its 7,000 points’ levels and broke below the key 6,900 points level.

I believe that the FTSE 100 is lying around a very interesting technical area and it will take either an upwards or a downwards break to attract investors’ attention to get behind the new move. So what are the levels that I think will be crucial to FTSE’s outlook?

In my mind the lows around the 6,840 points are the threshold for further losses to be triggered and if the FTSE breaks below them then we will definitely head for the 6,800 points and below. I am not saying that the FTSE 100 will break below this area for sure but at this time the bias seems negative.

To the upside my pivot point lies around the 6,900 area and if the FTSE is to correct from last week’s losses then a clear and decisive break of this barrier is needed. If that happens then I believe that the momentum that will be generated has the potential to take the index back to its previous 7,000+ points’ levels.

So for this week my strategy will be a simple breakout tactic, I am looking for the index to break out from its current range and I will let the market’s price action show me where the FTSE is headed and the momentum from the move will lead me towards my aforementioned targets.

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alpesh

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