FTSE eyes resistance

Price at time of writing – 6873.

In line with fresh breakouts by other global share markets, the FTSE too has shown strength recently, and trades 51 points higher than my update last Tuesday.

It is not yet an outright buy, however, as the index must first overcome very strong resistance waiting at 6922. My recommendation remains neutral.

Last week’s update touched on the fact the FTSE had managed to break above isolated resistance at 6775, a level that had kept the index checked for much of the past year. Overcoming this hurdle now clears the way for the FTSE to home in on my long-term target at 6922; a target that was very nearly fulfilled in May last year and requires a further rise of just 49 points. A successful challenge of this level would complete a 100% rise from the unique low of March 2009, and place the FTSE just 29 points shy of its all-time high at the turn of the millennium.

Today’s chart returns to the long-term version, dating back to the origins of the bull-market in July 1984. This coming July will mark the 30th anniversary of this remarkable period for equity investment, and, when the FTSE hits my 6922 resistance level, will mark a return to a level that represents a 600% rise from that very important low.

Recommendation: neutral. Traders may sell the index short at 6922, with an initial target of 6775.

FTSE 100 chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.