Now we have to see whether or not the next level will be higher than the one before it or if we are going to flip over to a downtrend.
The FTSE 100 gapped a bit higher during the trading session on Monday to kick off the week, perhaps sending the market towards the 6600 level above. That is an area that has been resistance, but at this point I think the market will see a certain amount of pressure in this general vicinity. If we do break above that level, it is likely that the market is going to break towards the 6900 level, possibly even the 7000 level.
The 50-day EMA sits just in the middle of the candlestick, suggesting that we are going to see a bit of sideways action, perhaps with more of an upward trend. If we can break above the 6600 level, I think that it will bring in a rush of new orders, with the 6750 level above acting as the next potential target. I like the idea of buying pullbacks as we go forward, due to the fact that stocks in general have done fairly well globally, and Monday kicked off the week on the right foot, so I think this is a market that will continue to find buyers on dips. I believe that the 200-day EMA sitting at the 6368 level is significant support as well, extending all the way down to the 6285 level.
If we did break down below that area, the market then would go looking towards the 6000 level rather quickly. In general, the FTSE 100 is probably getting a bit of a boost due to the UK economy enjoying the benefits of a larger vaccination percentage than many of its peers. Furthermore, the outlook for the UK economy is much better than originally thought after Brexit, so I think that we have a little bit of a “reversion to the mean” type of attitude in British assets in general.
The most recent high was lower than the one before it, but now we have to see whether or not the next level will be higher than the one before it or if we are going to flip over to a downtrend. That is what breaking below the 6285 level would represent for me. I think it is only a matter of time before we get buyers jumping back in and I remain bullish until we get that daily close below that support level.