The FTSE 100 index has been in a strong uptrend from the time it hit an intraday low of 6527 on back of the rising geopolitical tensions in the region. The waning geopolitical tensions and good economic data are being seen as a huge positive for the index in the near term. The index is approaching the resistance zone which is a downward sloping trend line and is presently at 6787. The weaker than expected inflation data was one other factor which led the index higher for the fifth straight day in a row as traders believed that the Bank Of England would not to be forced to raise short term interest rates, which many believe could have been catastrophic for the economy. The dovish comments made by the BoE chairman with regards to the short term interest rates have also been seen as a huge positive as investors and traders are at ease and believe that this upswing in the markets will continue.
On the charts, the FTSE100 has been in a strong uptrend, and if it manages to close above the resistance zone at 6787 the index may witness increased follow up buying in the short term. This may take the index to levels of 6900 in the intermediate term. The momentum indicator for the index has given a fresh buy signal on the back of a clear momentum shift towards the buy side. The medium term charts for the index are also looking very positive, and are clearly pointing towards bulls having the upper hand during current moment.
Actionable Insight:
Short FTSE 100 if it is unable to close above 6787 with an immediate target of 6700 with a stop loss at 6814
Long FTSE 100 if it closes above 6787 for a target of 6900 with a stop loss at 6694.