FTSE exhibiting continued weakness after sharp decline
James Chen March 24, 2014 7:01 PM
<p>The FTSE 100 (daily chart) has continued to show substantial weakness after making a marked decline from its multi-year peak of 6882 that was established […]</p>
The FTSE 100 (daily chart) has continued to show substantial weakness after making a marked decline from its multi-year peak of 6882 that was established in late February. That high just slightly surpassed the strong resistance imposed by two other relatively recent highs – 6876 in May 2013 and 6867 in January – before plummeting within the past month. Having just reached a six-week low of 6490 late last week, the UK equity index has declined by about 5.7% since its noted 6882 peak in late February.
In the process of this sharp decline, the FTSE has pierced below both its 50-day and 200-day moving averages, and has also dropped below a key uptrend line that extends back to mid-2012. A similar dip below this trend line last occurred in late January before a sharp rebound. Any further weakness in the index should find a major support target around the key 6400 level. Any trading below that level could potentially place the index within significant correction territory. Key upside resistance currently resides around the 6650-6670 price area.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.