The FTSE 100 went gone back and forth throughout last week, and Friday was no different. If the market were to break out above the recent highs, then it is likely that the FTSE 100 could go looking towards the 7300 level, perhaps even as high as 7600 based upon the consolidation area and the “measured move.” The market continues to be very noisy in general, but I do think that we are on the verge of a significant breakout to the upside, opening up the possibility of a move much higher. Pullbacks at this point will continue to attract a certain amount of attention, with the 50-day EMA sitting at roughly 7081 below.
The market has formed a bit of a bullish flag, so that is something worth paying attention to as well. I do believe that the market is ready to take off to the upside yet again, as we have seen so much in the way of momentum, and I do think that it is only a matter of time before the sellers give way. Furthermore, stock markets are starting to look positive in general, and I think the FTSE 100 will be dragged right along with them.
The 7000 level underneath is a large, round, psychologically significant figure and is essentially “fair value” in the consolidation area that we have been in for a while now, so I would assume that it would be a massive support level. Regardless, I think that we will continue to see plenty of buying on dips, due to the fact that the market will be looking towards the future as inflation is rising, thereby driving more money into the coffers of companies. The Bank of England is getting ready to raise interest rates, but it goes right along with growth, so that is a very likely reason for the market to go much higher. Stocks around the world are focusing on the reopening trade, and the stock traders in the United Kingdom are also paying close attention to the idea that the economy is opening up, and therefore should continue to grow in the short term. I have no interest in shorting this market anytime soon, as it has been a sucker spat.
