The FTSE 100 has broken out during the trading session on Tuesday as we continue to see a little bit of a push to the upside. All things being equal, we are above the 7200 level, which of course is a very bullish sign. That was the top of the previous consolidation range, so if we were to continue, the “measured move” suggests that we could go looking towards the 7600 level. The 7600 level is just the initial target though, because quite frankly this is a market that is in a major uptrend. That should continue to be the case going forward, so therefore I think at this point in time dips will more than likely offer plenty of value the people are willing to take advantage of.
The 7200 level should be supportive, but I think we have massive support all the way down to at least the 50 day EMA, which is currently just below the 7100 level. It is sloping higher, so it does suggest that perhaps we are trying to continue to build to the upside based upon momentum and of course the fact that the FTSE 100 continues to enjoy the global markets and economies rallying.
At this point, I think it is only a matter of time before value hunters come back into this market to take advantage of any set up that occurs. The market continues to be one that might get the occasional sell off, but at the end of the day equities around the world continue to go higher so there is no reason to think that this particular market is going to be any different. In fact, it is not until we break down below the 50 day EMA that I would be concerned about the overall attitude of the market, and therefore I think you need to look at this through the prism of finding value as we go along and look at those dips as opportunities as they occur. That might be some of the hardest trading to do, but when you find value and see that the market should go higher over the longer term, it is the best way to make profits. I do believe that we are closing towards the top of the range, which does suggest that we will get a bit of continuation.
