FTSE rising towards the New Year

<p>December 23, 2013 – The FTSE 100 (daily chart) has shown little to no signs of relenting in its long bullish run that has closely […]</p>

December 23, 2013 – The FTSE 100 (daily chart) has shown little to no signs of relenting in its long bullish run that has closely mirrored other major global indices.

FTSE Chart 23.12.13

 

From its most recent significant upswing to the 6819 peak at the end of October, the FTSE corrected down by almost six percent to its December low of 6417 – before rebounding.

This rebound occurred in a highly significant technical price area, as it closely conformed to a major bullish trend line extending back to the mid-2012 lows around 5225. The index dipped slightly below this trend line, as it did after a similar correction in June, but the rebound that began in mid-December has been swift and sure; breaking out above a short-term counter-trend resistance line drawn from the noted 6819 high.

This rebound provides a strong technical indication of the continuing strength of the entrenched uptrend after the most recent corrective pullback. The 50-day moving average is also rising steadily above the 200-day average, which has generally been the case since August 2012.

Currently, the index has reached a key resistance zone around the 6650-6665 price region. Closing in on the end of the year and into the beginning of the New Year – if there is further upside momentum and trend continuation above this resistance zone – the FTSE should likely begin to target a re-test of the noted October 6819 high and then the May 6876 long-term high.

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.