The FTSE 100 rallied just a bit during the trading session on Monday to show signs of strength again, as we continue the overall uptrend. This is a market that has been in a downtrend for a while, even though it has been a bit noisier as of late. The candlestick for the trading session on Monday close that the very top of the range, which is a good sign as well. This is not to say that we definitely are going to take off on Tuesday, but it certainly looks as if there is more momentum to the upside than down.
We have filled the gap from before, and now that we are closing towards the top of the candlestick, it is very likely that we will continue to blow through this gap and go looking towards the gap above. At this point, I would anticipate that the market makes a move towards the 7200 level. This is my best case, but I also believe that it is going to be very noisy, so I would not anticipate that there would be an easy route higher.
To the downside, the 7000 level should offer a little bit of support, but I think that given enough time we will probably continue to look at it as an area that is simply a large figure, probably not much more than that. After all, we also have the 50-day EMA underneath offering support right along with the uptrend line from the ascending triangle. With all of that in the picture, it is difficult to imagine a scenario in which we simply fall apart, and I think that short-term pullbacks at this point will end up being buying opportunities as we continue to see the push ever so higher.
In fact, it is not until we break down below the 6800 level that I would be concerned about the market, and even then, I think we probably have plenty of support near the 200-day EMA. With all that being said, it looks as if the market is ready to go much higher, but we need to get through this congestion area to start pushing to the upside with any type of momentum. Remember, stocks are being supported by massive amounts of liquidity in the marketplace, and the FTSE 100 will not be any different than the other indices.
