Rally has momentum
The UK 100 is closing in on 7,200 and approaching levels not seen since the start of the pandemic.
This isn’t the first time the index has eyed up this level in recent months but in the past it has failed to break through in any significant way—it briefly touched 7,217 a couple of months ago before reversing course—and each time a corrective move has followed.
This has left the FTSE trading between 6,800 and 7,200 since April but that could all be about to change.
While we may see some profit taking on approach, the MACD and stochastic suggest there’s plenty of momentum still in the rally that could carry it to levels not seen in 18 months.
If we do see some profit taking, the rising trend line below could be interesting support if the rally is going to continue. A move below this would suggest a larger correction may be on the cards.