Where now for the FTSE 100 and FTSE 250 after ‘Boris Bounce’?
The blue-chip index and the FTSE 250 have both surged in the wake of the UK general election that saw the Conservative Party secure a landslide victory.
The FTSE 100 has gained more than 3% since the Conservative’s secured a landslide victory in the UK general election last week, with the blue-chip index closing at a touch higher on Tuesday at 7,525.
The FTSE 250 also surged by more than 4% since the election, beneffiting from the so-called 'Boris Bounce', though closed 1% lower on Tuesday to 21,690.
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IG Technical Analysis
The FTSE 100 has seen a sharp surge in the wake of the UK election and US trade war breakthrough. The rise through 7,446 points towards a potential surge towards the next major resistance levels of 7,730 and 7,903, according to IG Senior Market Analyst Josh Mahony.
However, the daily chart highlights a difference perspective. The wider creation of lower highs remains in play until we see a break through 7,730, and the recent rally into 76.4% Fibonacci resistance being respected with slight losses.
As such, watch out for the whether we see this 7,557 level broken or not as a guide to where we go from here. In particular, a break below 80 on the stochastic oscillator could point towards a more bearish phase coming into play for the near-term.
The FTSE 250 saw a huge surge into record highs after the UK election, with the rally taking us through 21371.
We have seen price consolidate around trendline support since then, and the ability to remain above both trendline and horizontal support will be crucial in the push to continue gaining ground.
A decline below that zone of support could point towards a retracement phase coming into play.
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