The FTSE 100 initially went sideways on Wednesday, but found enough support just above the 7500 level, and bounced nicely. It looks likely that the market is ready to go towards the 7600 level above, which has been the top of the overall consolidation area. I think that as we pull back, value hunters get back into the marketplace, and we will eventually break above the 7600 level and go much higher. Once we clear that area, we go higher, perhaps reaching to 7800 level, and then eventually the thousand level.
As the markets have been bullish in general, I think we continue to go higher over the longer term, and that pullbacks will offer buying opportunities that we can take advantage of. The market looks likely to break out to the upside, but I think we may need to make several attempts to get above the 7600 level. This is a market that continues to be very noisy, so because of this I would keep my position size small until the market proves you correct, and then add to It. Selling at this point is very unlikely, as I think given enough time the buyers will show up. The British pound is historically cheap, so therefore it gives us an idea of value in the stock market and of course the cheapness of British exports.
If we were to break down below the 7400 level, that could change everything for me as far as the outlook of this market is, but the markets look likely to be suffering a major attitude change in the market on that move.
FTSE 100 Video 21.12.17
This article was originally posted on FX Empire