FTSE 100 forecast - daily chart 13th October 2010
The ftse 100 index surged higher once again yesterday, breaking out from the recent range of the last few days, and ending the London trading session with a wide spread up candle which closed at 5,747.35, having reached a session high of 5,760.49 earlier in the day. The strong move higher was largely in response to the release of the FED minutes in the US trading session of Tuesday evening, which came too late for the UK markets, but which confirmed that the FED policy of quantitative easing would be implemented shortly, and certainly before the end of October. As such, investors around the world continue to seek alternative investments, moving their paper currency based assets into equities, commodities and bonds as a result, a phenomenon we are likely to see continuing for some time as the Fed policy drives the US dollar ever lower as a result.
From a technical perspective yesterday’s candle has provided further confirmation of the strongly bullish picture, with the 5,700 price area now providing a further platform of support in the current bullish trend. Both the 9 and 14 day moving averages continue to provide excellent support to the move, confirming the bullish signals we outlined in yesterday’s market forecast. With the 40 day moving average now firmly above the 200 day moving average this is adding further weight to the trend, and we are now looking for a breach of the 5,833 high of April as a short term ftse forecast, followed by a break above the 6,000 level in due course. Should this psychological level be achieved then expect to see the 6,250 level broken, possibly by the end of the calendar year.
