CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Trading view: looking for higher levels in the FTSE and Germany 30

Watch for a break in the FTSE 100 cash this week above the double top at 7130. Specifically, a weekly close above this strong horizontal resistance would suggest a continuation of the December rally.

Source: Bloomberg

The daily chart shows price moving quite nicely within a bullish channel, with buyers happy to step in on pullbacks into the five-day EMA (the purple line). This is obviously bullish, although if we look at price action and the daily candles we can see a lack of real conviction to push prices higher, with small bodies in the candles. There is a measured calm from both the buyers and sellers, and while the index is printing higher highs and lows, there are no real signs of euphoria. Price action could be best described as a cautious optimism.

Chris FTSE chart 1

We can see that since 16 December the index has failed to close anywhere near the day’s highs, which would have suggested a far higher quality to the rally.

Taking the timeframe out somewhat, the weekly chart also of interest. We can see just how strong 7131 is from a resistance perspective, with this level marking tops in April 2015 and October 2016. Thus a weekly close above 7131 would be bullish and suggest a continuation of the move towards 7300 and onwards. One for the radar.

Another chart that should be on the radar is the Germany 30 cash and, while I am prepared to wait for a closing break on the FTSE, the Germany 30 cash is already looking like a buy.

Having broken the recent 11,484 to 11,400 consolidation with a really bullish move overnight (albeit on terrible volume), the preference here is to actually wait for a pullback into the 5 day EMA at 11,526, with stops placed below the consolidation range low of 11,400. The obvious target is the 2015 high of 12,400, although there would be a lot of wood to chop to get to that lofty level.


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