Bulls Charge Into 2017 With 7197 As FTSE Resistance
FTSEDayTrader Limited | Jan 03, 2017 12:42
We may be wondering how this new year will play out, but it certainly got off to a strong start with the out of hours trading yesterday leading the FTSE to a rise to the 7155 resistance level that we had from last week. The DAX was on a charge yesterday with a decent PMI data result, adding over 120 to test the gap at 11620. The FTSE 100 had an initial dip from the 7155 level but has risen back to test it overnight. Its almost like they all want to climb as high as they can before all hell breaks loose as the daily RSI is now at 80 (overbought)!
FTSE 100 Outlook and Prediction
The daily RSI is currently a 80 which is a little concerning for the bull charge at the moment. Whilst not a reversal signal itself (it can stay overbought or oversold for a while) it does indicated that we may well be getting a little bit toppy! We have had a few tests of the 7155 resistance level now so the third test of this is likely to break (probably today) and we are on for a rise towards R2 at 7197. The charts are all bullish to start with, with the 2 hour flashing a buy signal at 7125 overnight - which we have climbed off to retest that 7155 level. Even gold is rising from its recent lows!
Whilst this is the first day back it can be good to just let the dust settle and I am expecting that bullishness from yesterday to continue, at least initially, and am watching 7179 and 7197 as resistance areas. 7170 is the top of the 10 day Raff and we also have a fib level here.
From a support perspective, we have the daily pivot at 7126,and with the 2 hour chart showing support still at the 7130 area this level might well hold if we do drop back. More major support is 7096 where we have the 20 day Bianca - a break below this would start to turn the table on this bull charge and we should start to drop down towards 7000. The bulls are pretty strong though so it might well take a fair bit of effort from the bears to get that low - probably not likely at the moment.
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