Indeed most of this decline occurred in last Thursday's 100-point daily fall. This should not deter a bullish stance, however, as sideways churn following a powerful rally is usually the precursor to a further extension. My long recommendation remains intact.
Last week's news that the eurozone has emerged from recession, with the economy as a whole having grown by 0.3% in Q2, is excellent news for the British economy too. Europe remains the UK's most important trading partner. Indeed, in January this year Britain leapfrogged France to become Germany's top trading partner. The fact that Germany has led eurozone growth, with figures of 0.7%, bodes well for a continuation of Britain's own recovery. As I have highlighted in recent weeks, the stock markets of struggling peripheral nations such as Spain are now in strong uptrends. The fundamental statistics now appearing around Europe can only add further weight to the technical buy signals already triggered in many of these markets.
The pull-back following last month's 11% rise on the FTSE 100 currently measures 3.125%, and has shunted the index back into my former resistance band defined as 6491-6556. This same band is now likely to provide the new support going forward. As a result, the upside targets remain unchanged.
Recommendation: Stay long. Target 6922. Stop-losses can remain in place and trigger on weakness below 6300.