The FTSE 100 has rallied a bit during the course of the trading session on Thursday only to turn around and show signs of weakness again. Because of this, the market is likely to continue to see a lot of volatility, as it seems like the matter what we do, we cannot get any type of straightforward move. The FTSE 100 of course is going to be no different than any other market, being thrown around by algorithms and headlines from time to time. That being said, there are some technical indicators to keep in mind.
The 6800 level underneath of course is an area that has seen significant resistance in the past, so now that we have pulled back a couple of times and bounce again, it is likely that we will continue to see this area as being important. That being said, we have initially rallied a bit during the course of the trading session, only to form a bit of a shooting star. If we pull back towards that area, then I do anticipate that there should be some buyers trying to get involved. However, what concerns me is that we had such a massive red candlestick and now it appears that we are struggling to reverse that.
Having said that, there is a lot of support not only their but at the 50 day EMA underneath that is walking right along the uptrend line that has been formed and that ascending triangle that is so prominent on this chart. On the other hand, if we do break above the top of the shooting star, then the market is likely to go looking towards the 7000 handle. The 7000 and of course has been the most recent resistance barrier and is a large, round, psychologically significant figure. If we do break above there, then the market is likely to continue going much higher, perhaps reaching towards the 7300 level. The reason I say 7300 is the fact that the ascending triangle measures for that type of move, so from a technical analysis standpoint that is where you have to assume the market will eventually go. That being said, it is likely that we continue to see a lot of noisy trading in the short term, because we are obviously in an area that features a lot of choppy behavior.
