During the day on Tuesday, we initially tried to rally in the FTSE 100, but turned right back around to form at the end of the day a shooting star. A break down below the candle for the session could very well cause a bit of a pullback but as you can see I have the 6600 level marked on this chart as it was previously resistive in this marketplace. Now that we are broken above there, a pullback to this area could very well be a nice momentum building exercise as quite often you have to retest these areas. You can see that we had previously rallied directly to this level, then went sideways for a while to build a bit of momentum.
Typical breakout
For myself, this is a typical breakout as we have broken above the top of resistance, and now looks set to go back and try to find buyers. Quite frankly, a lot of sellers will have lost some money there, and they would be willing to reverse their situation if we get back to that region. A supportive candle in that area is exactly the signal that I’m looking for to go long. However, if we break above the top of the shooting star, that’s a very bullish sign as well and I believe that the market would show increased momentum. However, I believe that more than likely we will have to pullback in order to build up the necessary momentum.
Remember, the FTSE 100 is chock-full of exporting companies, and with the softer than usual British pound, that should help the export markets. Because of this, I believe that the FTSE 100 will continue to gain in the CFD markets, and as a result should be something that you pay quite a bit attention to. In fact, this is one of my favorite CFD markets right now.
