FTSE 100 Forecast: Index Recovers Quite Nicely

Christopher Lewis

As long as the British pound continues to be very cheap, that helps the idea of stocks going higher in that country, so this is yet another tailwind for this market.

The FTSE 100 fell after initially gapping higher on Wednesday but then fell almost immediately. At this point, the market found plenty of buyers, right in the middle of the consolidation of the most recent noise that made up the uptrend for the FTSE. The 50-day EMA is currently sitting right around the 7200 level, so I think it will make sense that there should be plenty of value hunters in this general vicinity. Because of this, I think the recovery makes sense and, as we have seen stock markets recover quite nicely in Europe during the session, I think this all comes in quite nicely as far as a package is concerned.

Advertisement
Current volatility is making great stock trading opportunities - don't miss out!

If we were to break down below the 50-day EMA, then it is possible we could see a little bit more of a pullback, but right now I do not think that will happen any time soon. That being said, even if we did, I suspect that the 7000 level will be the “floor in the market”, as the 200-day EMA is approaching that level, and we have a lot of structural noise in that general vicinity that could come into the picture as well. This is a market that will look at that as a nice buying opportunity, assuming that we can even get down there. If we break above the top of the candlestick for the trading session, then it is likely that we could go looking towards the 7400 level. I like the idea of buying short-term pullbacks, and it certainly looks as if the Wednesday session has done quite a bit to bring upon the idea of plenty of “buy on the dips” attitudes.

As long as the British pound continues to be very cheap, that helps the idea of stocks going higher in that country, so this is yet another tailwind for this market. At the end of the day, we are in an uptrend anyway, so there is no point in trying to fight that. The market will continue to be a situation that is more of a grind than an explosive move to the upside, but this little pullback could even be thought of as a potential bullish flag.

FTSE 100 Index

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.