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UK Stock Market Ready To Reverse?

Stock-Markets / UK Stock Market Apr 19, 2015 - 09:42 PM GMT

By: Richard_Cox

Stock-Markets

Over the trading sessions seen last week, UK markets have posted some declines that have caused concern for many investors that are long equities.  So the next question to ask is whether or not this is a true bearish reversal of the longer term bullish trend.  If this is the case, it would be a good idea for investors to start taking profits on long positions while prices are still holding at relatively elevated levels.  But if this is not the case, the latest declines could prove to be a good opportunity to continue buying in UK equity markets or to establish new long positions for those that do not already have exposure in regional stocks.


“One factor that could support UK stock markets is the rising revenue data that has been seen in a wide variety of sectors,” said William Carey, markets analyst at Media Group London.  “This ultimately suggests renewed activity in a sector that tends to be a leading indicator to later rises in market valuations.”  With this in mind, it is a good idea to assess recent price activity in the main stock benchmark for the UK, the FTSE 100 index.  Here, we will look at some of the most important price levels for those that are looking to establish new positions in the market.

_____________________________________

FTSE 100 Index

Critical Resistance:   7100

Critical Support:   6980

Trading Stance:  Bullish Reversal is Possible

ftse.PNG

FTSE 100 - Stock Trading Strategy:  Recent declines warn of a bearish trend but fundamental factors support the possibility of a bullish reversal.  Look to enter into new long positions with prices trading near support at 6980.

The broader trends in the FTSE 100  has been a major feature of the market for most of this year but recent declines have made investors worry about potential bearish declines.  But since most of the long term momentum is still positive, it is a better idea to take the other side and look for new price levels at which to base long positions.  Daily RSI is starting to turn upward from mid range, so there is good scope for further price rises as we head into the month of May.  This suggests that there is potential for prices to rise back into the 7100 area, which is a zone of prior resistance.  This marks a solid area for profit targets for traders that are able to establish positions at these lower levels.

By Richard Cox

© 2015 Richard Cox - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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