Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market FTSE 100: New Record Highs In Store?

Stock-Markets / Stock Markets 2015 Mar 05, 2015 - 08:18 PM GMT

By: Richard_Cox

Stock-Markets

Stock markets continue to impress and the bull run in the FTSE 100 has its sights set on the 7,000 level.  With price activity trading this close to a clearly defined psychological level, it would not be at all surprising to see an upward break.  But the real question is whether or not a move like this would actually show sustainability in the coming months.  This is a critical question for those that are considering long exposure while valuations are trading at such elevated levels.  Clearly market momentum is still positive but traders entering late still run the risk of being caught long at the wrong market price.  For these reasons, newer investors must assess the underlying strength of the blue chip stocks that actually make up the FTSE 100.


“For the most part, individual stock stories in the blue chip sector have been encouraging,” said Michael Carney, markets analyst at TeachMe Trading. “Two key examples here can be found in Aviva and Friends Life which posted quarterly earnings results that were well above market expectations.”  Both of these stock stories were high encouraging and they helped to stoke the optimism that has characterized market activity for most of this year.  Since we are now in the midst of earning season, it appears as though markets will only need a few more stories like this to gain the momentum it needs to finally break the 7,000 level.  Needless to say, this would be a highly bullish event and we will probably start to see even more attention in the financial media starting to focus on the long-term rallies in the FTSE 100.

For these reasons, it will be highly important for new investors to have some sense of the historical price activity in the FTSE 100.  This will likely be the best way of determining where buy entries should be placed if you are an investor that is looking to capitalize on the positive momentum seen in the UK’s foremost stock benchmark.  Here, we will take a closer look at that recent price history.

_____________________________________

FTSE 100

Critical Resistance:   7000
Critical Support:   6850

Trading Bias:  Bullish

(Chart Source:  CornerTrader)

FTSE 100 - Stock Index Trading Strategy:  Momentum still firmly in bullish territory but starting to reach overbought territory.  Wait for corrective pullbacks before establishing new long positions to improve on excess risk levels.

From the chart perspective, there is some very interesting activity in the FTSE 100.  Markets have attempted to break through the closely watched 7,000 level on several occasions, only to be forcefully rejected before accomplishing this.  We are now embarking on yet another attempt on this important psychological barrier and it is generally unlikely that resistance levels hold up after multiple tests. 

In any cause, indicator readings have shown that prices are becoming overbought, so this suggests that traders should exercise patience before jumping into these markets at current levels.  In other words, the bull trend for the FTSE 100 is still firmly in place, but it is better to take a conservative stance and allow prices to fall back a bit before going long.  The first level to watch in this regard is 5850, and this is a price area that is likely to see buying activity given its previous role as a level of resistance.

By Richard Cox

© 2015 Richard Cox - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in