Last week we were discussing whether the break higher in the FTSE 100 would be sustained and if the index could continue rallying higher. Today we’re looking at the FTSE holding strong for the time being trading around the 6,400 points which is not far from the 6,480 points’ highs where the London index was at the end of last year.
As I mentioned in my analysis last week I am conservatively bullish over FTSE’s medium-term outlook and it seems that the current uptrend could have more room to grow to the upside. The momentum pushing the FTSE higher seems to be less strong compared to last week but my analysis indicates that the index still has the potential to go on, at least from a technical standpoint.
My targets to the upside remain around the same area I highlighted in my last note which is the 6,450 to 6,480 points’ area but for that to take place we will need fresh momentum and a further fundamental backing. The economic calendar this week might not prove stimulating enough to drive the FTSE to higher ground for now so we need to remain equally vigilant over a correction lower in the short term.
In case the FTSE pushes lower as a short-term correction might develop then I would like to trade it below the 6,350 points and look towards the 6,300 points’ level as my target. A more meaningful push lower than that area would indicate that our bullish views might be too enthusiastic and we need to take a step back and re-evaluate our views. However liked I said above my primary scenario suggests a long trade above the recent highs of 6,420 points targeting the 6,450-80 levels.
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