The FTSE100 index continues to remain firmly bullish on the daily chart following the break out and hold above the 5400 price handle which had become a critical technical level.  In particular, the failure to breach the 5411 price point of late July and early August had originally signalled the sell off during the latter part of the month which saw the index break below both the 20 and 50 moving averages ultimately to test support at the 5070 region.  A reversal from this level was duly signalled by a deep hammer candle on the 31st August which opened at 5201, re-tested a low of 5129, before closing the day higher at 5225.  This gave us a clear and obvious FTSE betting technical signal that the market was about to break higher which duly arrived on the 1st September with a wide spread up candle with no wicks to either top or bottom, taking the index back above the 20 day moving average as a result.  The final leg up of this rebound finally occurred on Thursday 9th September, following a further hammer candle the previous Wednesday, as the market opened at 5429 and closed as a wide spread up candle at 5494.  As such we now have a deep and sustained platform of support immediately below which should now provide a solid springboard for the index to continue higher with our next target being a re-test of the high of 16th April, at 5825 and this should be achieved in the next few weeks provided the clear risk on appetite remains across the broader financial market.

Basel III & China data cheers bulls

The FTSE100 has been trading sideways contained in a narrow range between the 5200 and 5400 price area of the index.  The index opened today at 5350.5 but closed the session lower at 5276 as fundamental news from the US weighed heavily across all the major indices.  Trading volume was extremely light, not surprising given the summer doldrums, and from a technical perspective today’s narrow spread down candle closed once again below both the 9 and 14 day moving averages.  To the downside the 40 day moving average continues to provide an excellent platform of support and provided this key indicator is not breached then we can expect some further sideways price action over the next few days and any break above 5410 to the upside should then signal a breakout and consequent move higher for the FTSE100 index in due course with a solid platform of support then in place.  As outlined earlier the US market jobless claims, which came in worse than expected at 500k for the week, coupled with a slump in the Philly Fed which reached its lowest level since July 2009, all conspired to push the FTSE100 lower in today’s trading session.  However, the longer term outlook remains firmly bullish provided we see a break and hold abofe 5410 with some clear water below.

For morning trades the FTSE100 is likely to open lower.

Wall Street tumbles spooked by shock jobless claims & a slump in Philly Fed

The FTSE100 continued to trade sideways yesterday in a narrow range opening at 5386.16 and closing the London trading session at 5405.15, and ending as a narrow spread candle as a result.  Trading volumes were modest at 508,289,053 which is roughly in line with expectation for the summer period.  Technically the index continues to hold above all three shorter term moving averages, with both the 9 and 14 day in particular offering good support to any short term pullback.  Tuesday’s candle also suggested that the recent mildly bullish sentiment remains firmly in place with a test of support from the 14 day moving average which held firm as a result.  With the recent break above 5250 now complete this is adding further to the positive picture for the index and suggests that we should see a further rise in the short term fully supported by both the moving averages and also the underlying volume.  In the longer term we need to see the FTSE100 begin to test potential resistance at the 5644 level and any break through and above the upper level of this level at 5743.96 would open the way to a further and longer term bullish run towards 6000 and beyond in due course as we come out of the summer doldrums and into the last quarter of 2010.

The ftse 100 closed today’s trading session at 5313.95 having initially opened at 5319 and tested the high of 5375.23 before falling back as the US markets added a bearish tone to equities in general.  Technically on the day we have a weak shooting star candle which confirms that of Tuesday followed by Wednesday’s bearish candle.  It is interesting to note that Tuesday’s shooting star pattern was also accompanied by a relatively high surge in volume with 1.8m traded on the day, almost double that of today.  As such this would suggest that the market is selling and we should expect the ftse 100 to move lower as a result.  However, today’s close still maintained its position above all three short term moving averages (9, 14 & 40 day) suggesting that the recent, underlying bullish sentiment still remains in place.