The FTSE 100 has gapped higher to kick off the trading session on Thursday to reach towards the most recent high. At this point, the market is likely to continue going higher, perhaps reaching towards the 7000 handle. We are a little bit overextended, and at this point in time it is likely that we will see a pullback. That pullback should be thought of as a buying opportunity though, and you can plainly see that I had an ascending triangle marked on the chart that we are now well above. By pulling back, it gives traders the opportunity to pick up a little bit of value, roughly around the 6800 level.
The FTSE 100 has been rallying quite significantly against the backdrop of global stocks rallying overall. The FTSE 100 also is going to get a bit of a boost due to the idea that the United Kingdom has far outperformed many of the world’s other economies when it comes to vaccinations. In other words, the economy is more than likely going to continue to expand much quicker than some of its counterparts.
It should be noted that the British pound fell rather hard during the trading session, so that also makes the idea of British exports cheaper, so perhaps that may be part of the tailwind that we see in this market right now. Because of this, I think that we are trying to line things up for a bullish run to that previously mentioned 7000 handle, and I do think that it is only a matter of time before we break out above there.
I have no interest in shorting this market, and I believe that we have multiple opportunities to buy this market on signs of support all the way down to at least the 50 day EMA, currently sitting at the 6647 handle. With that being the case, this is a “buy on the dips” type of situation, much like many of the other stock indices are currently. Once we break above the 7000 handle, I would anticipate a move towards the 7200 level is the FTSE tends to move in 200 point increments over the longer term. Nonetheless, I would like to see a little bit of value in this market, and that can be found after a down day or two.