The FTSE 100 built on last week's gains to close 15.1 points higher at 6172.4, its highest level since February 2001 as the market took its cue from the US and Asian stock markets.

Technical Analysis
1. Price Patterns - FTSE has broken to new highs, a retracement to the breakout point (previous high) is most likely for the breakout to be confirmed. The FTSE is targeting 6280.
2. Support - Support zone is 6135 to 6000.
3. MACD - (Bottom indicator) - The MACD is moving into overbought territory and suggest a pause in the trend or slowdown to unwind the overbought state a little.
4. 40 week Moving Average - Is continuing to act as support,.
5. Up trend Channel- Is likely to halt any rally and act as a good selling point, presently 6240 .
6. Time - The move higher has been explosive though inline with the rally expected in the US in the run up to the US Elections, it suggests that the trend following the election may be weak..

Conclusion - The FTSE is targeting 6280, but present state is overbought so may correct back into the support zone of 6135 to 6000. The FTSE is still supported going into the US Election.

Target - The FTSE is first targeting 6280.
Stop-Loss - Given the overbought state, the nearest stop would have to be, below 6000, so some distance.

Nadeem Walayat

(c) MarketOracle.co.uk 2005-2006

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