At this level, it appears to be like like we might see just a little little bit of a pullback, however that pullback ought to be checked out via the prism of providing worth in a longer-term uptrend.
The FTSE 100 did rally throughout the buying and selling session initially on Wednesday to achieve above the 7200 stage, an space that I talked about during the last couple of days. Now that we reached that stage, it seems that there was a certain quantity of profit-taking at that massive determine, which might not be an enormous shock. The market tends to maneuver in 200-point increments, very similar to the S&P 500.
At this level, it appears to be like like we might see just a little little bit of a pullback, however that pullback ought to be checked out via the prism of providing worth in a longer-term uptrend. In spite of everything, the market has been rising for months on finish, and it could be approaching the highest of an total channel to the upside. Due to this, it is rather probably that the pullback might discover itself reaching in direction of the 7000 deal with. The 7000 deal with is essential, as it’s a massive, spherical, psychologically important determine and roughly the place the 50-day EMA pops up. The 50-day EMA is a big indicator that lots of people pay shut consideration to as it’s usually indicative of the medium-term pattern, and an space that provides fairly a little bit of dynamic help and resistance.
If we flip round and break above the highs of the day, then that implies that we might clear the 7200 stage, which might be a really bullish signal and will open up the potential of a transfer in direction of the 7400 stage, after which finally the 7500 stage, which is my longer-term goal. Due to this, I feel that purchasing dips ought to nonetheless work, until we break down under the uptrend line, and by extension the 7000 stage, then I see no motive to quick this market. I could possibly be satisfied of shorting it beneath there, maybe attempting to get all the way down to the 200-day EMA. Between right here and there, I feel there are many locations that individuals are going to be thinking about making an attempt to select up worth, so I nonetheless have a look at this via the prism of a “purchase on the dips” sort of state of affairs, simply as I’ve for a number of months. The UK on the brink of open up utterly in roughly a month or so helps the scenario as nicely.