FTSE slips but holds its ground

Price at time of writing – 6437.

Over the six trading sessions since my last update, the FTSE has given back a further 75 points, or slightly over 1%.  

Doubtless the index is being impacted by political events in the US but, surprisingly perhaps, has held its ground fairly well. Investors can be skittish in circumstances such as these, so we should read the FTSE 100's reluctance to cede ground beneath 6400 as a positive. My long recommendation remains intact.

Although the FTSE has slipped below the support/resistance band defined as 6491-6556, it has not done so by any margin that causes concern. Nor have I detected any increase in downward momentum. The support level that represents a 4.165% pull-back from the recent minor high was tested twice over the past week. This level, at 6382, held firm on both occasions. Any increase in momentum beneath 6382 would require the FTSE to complete a deeper pull-back, resulting in a test of the next line of support at 6242. I have added both these lines to today's chart.

If we assume yesterday's intraday low was relevant, an 8.33% rise from there would add yet another line to the already strong resistance band defined as 6898-6922. Again, I have added this line to today's chart, if only temporarily.

Recommendation: stay long. Target 6922. Stop-losses can be raised and activated on momentum below 6350.

FTSE 100 chart

 

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