FTSE rebounds and rallies in attempt to regain highs

<p>The FTSE 100 (daily chart shown below) rebounded sharply on Tuesday after hitting a low of 6670 early in the week. That low dipped slightly […]</p>

The FTSE 100 (daily chart shown below) rebounded sharply on Tuesday after hitting a low of 6670 early in the week.

That low dipped slightly below the 50-day moving average before bouncing back from just above key support and currently advancing to approach long-term resistance once again.

This long-term resistance was first established in May as more than a decade-long high at 6876. It was then closely approached and re-tested in January with a high at 6867.

 

FTSE Analysis Chart 04.03.14

 

Most recently, it was slightly surpassed with a new long-term high at 6882 just last week.

These three highs collectively form a major resistance barrier for the index.

After the noted rebound this week, the FTSE has been rallying for yet another attempt at resistance.

In the event that this goal is reached, the index would be situated at a critical price juncture that could potentially put it on track once again to continue the multi-year bullish trend.

A breakout above resistance could then target the 7000 psychological level to the upside.

Near-term downside support on another pullback within this strong bullish trend continues to reside around the 6650-6670 price area.

 

Join our live webinars for the latest analysis and trading ideas. Register now

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.

For further details see our full non-independent research disclaimer and quarterly summary.