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Last Thursday’s intraweek high of 6725 was not sufficient to break above the resistance at 6775, however, and until such time as it does, my recommendation remains to stay short.
It is encouraging to observe that cashed-up foreign companies are beginning to see value in the UK share market. The UK equity market has long been ‘cheap’ relative to other global markets, and with the economy slowly repairing the damage seeded during Gordon Brown’s ten-year term as chancellor, approaches such as the one for AstraZeneca may be just the beginning. If so, this could be the spur needed to set the FTSE on course to break above its resistance at 6775 and 6920.
Although the FTSE has been on the front foot the past fortnight, it still has work to do to trigger a change in my recommendation. The resistance at 6775 has checked the index on each occasion since the important low in June 2013, and is the obvious first hurdle to overcome.
Recommendation: stay short, or sell on any further rise to 6920. Target 6293. Stop-losses remain unchanged and may be triggered on momentum above 6975.