courtesy of investors intelligence
FTSE-100 still penned in....
Despite seeing strong up moves in Sterling and falling market volatility (a bullish signal), UK equities are still struggling.
The bulls on Friday have not been able to climb over the formidable wall at 4500, trapping the FTSE100 Index in between the resistance and the rising 50-day MA (see right). Technically, a breakout will occur soon, and because of the rising lows, we favour a positive outcome.
But, we are well aware of the risk of a failed upside break. Evidence for this possibility includes (1) Miners have come off their near term highs, suggesting potential uptrend failure; (2) Banks are battling to hold on to their rallies. We would not be surprised to see some retracements here following the tremendous rallies from the lows (even Gulf investors have recently booked profits on their long positions in Barclays). So, we are increasing some short positions (again) in our MP in case our bullish expectations failed to materialise.
