The FTSE 100 initially pulled back just a bit during the trading session on Thursday but then turned around to show signs of strength. The market then reached higher to fill the gap from the previous session, and it now looks as if the market is ready to go higher. The market is likely to go looking towards the 7200 level, which is a large, round, psychologically significant figure and it is also worth noting that it is the “measured move” from the ascending triangle that I have drawn on the chart.
Beyond all of that, the 50 day EMA has held up quite nicely, and therefore it is likely that the ascending triangle support line could extend further, and you could completely ignore that triangle and simply play this as a trend line play. Either way, regardless of how you look at this market, the trend is higher, and it certainly looks as if there is significant support underneath. The market is one that you cannot short anytime soon, because not only do you have the 50 day EMA and the potential extended trendline, but you also have the 6800 level that was so resistant recently, so one would think that there should be a certain amount of support there.
Ultimately, if we broke down below the 6800 level could change a lot of things and send this market down towards the 200 day EMA, but I do not see that being the most likely of scenarios right now due to the fact that we have seen so much in the way of strength overall when it comes to stocks globally. Remember, the correlation between assets and groupthink is something that you need to pay close attention to, because the FTSE 100 is going to move based upon the idea of the reopening situation globally, not just in Great Britain. Yes, the UK economy is getting ready to reopen quite significantly, so that is one thing that people will be looking to make a play on, but furthermore we also have central banks around the world throwing liquidity into every direction they can, so people are simply buying stocks in general. The FTSE 100 of course will be no different and therefore I would anticipate that buyers will continue to jump into this market on every dip.
