Is the FTSE Finally Ready to Breakout?
The FTSE 100 has been trading within a well-defined range for more than 8 months. This range has created some fantastic trading opportunities at the extremes of the range, buying reversal patterns at support and selling reversal patterns at resistance.
However, just as ‘the trend is your friend until the bend in the end’, the range is your friend until it breaks with a bang! And we are seeing signs in the FTSE’s recent price action which may indicate that this index is getting ready to breakout…
1. The New Year sell-off didn’t make back to the bottom of the range. Instead, the market formed a higher swing low.
2. We have seen a series of higher swing lows form in recent weeks.
3. Price action during the last two weeks has seen the market consolidate just beneath resistance.
FTSE 100: UK 100 Daily Candle Chart
Past performance is not a reliable indicator of future results
Sector Snapshot
At the sector level, the UK market has developed a distinctly bullish glow during the last seven sessions. Whilst the index itself has been treading water and consolidating, we have seen broad-based buying with the majority of the FTSE’s major sectors making gains of more than +1%.
The sector strength along with subtle technical signs may not be enough to mark the FTSE out as a screaming buy, but they are enough for FTSE bears to pause for thought before simply selling at resistance.
UK Sector Performance (7-Days)
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
However, just as ‘the trend is your friend until the bend in the end’, the range is your friend until it breaks with a bang! And we are seeing signs in the FTSE’s recent price action which may indicate that this index is getting ready to breakout…
1. The New Year sell-off didn’t make back to the bottom of the range. Instead, the market formed a higher swing low.
2. We have seen a series of higher swing lows form in recent weeks.
3. Price action during the last two weeks has seen the market consolidate just beneath resistance.
FTSE 100: UK 100 Daily Candle Chart
Past performance is not a reliable indicator of future results
Sector Snapshot
At the sector level, the UK market has developed a distinctly bullish glow during the last seven sessions. Whilst the index itself has been treading water and consolidating, we have seen broad-based buying with the majority of the FTSE’s major sectors making gains of more than +1%.
The sector strength along with subtle technical signs may not be enough to mark the FTSE out as a screaming buy, but they are enough for FTSE bears to pause for thought before simply selling at resistance.
UK Sector Performance (7-Days)
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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