FTSE 100: 7720 Resistance | 7660 Support
FTSEDayTrader Limited | Jan 02, 2018 08:59
Happy New Year and I wish you all the best for 2018, and hope you have had a good break.
We have started the year strongly. led by regional gains in Asian markets, after the end of 2017 saw a small pull back before markets closed for the year. It looked like the FTSE100 might manage to close the year above 7700, but the bears appeared just below that level and brought it down a bit to end the year around the 7685 level. We are of course at the start of a new month so I would expect a rise initially today, as the usual new month money flows in. With the strong end to the year the 2 hour chart is bullish and showing support at 7661 to start with today.
As mentioned above we should see an initial influx of new month to start things off today and we may well see a break of the 7703 R1 level that has been tested a few times now. If so then a rise towards the fib resistance level at 7718, and the longer term daily resistance at 7725 looks likely. Above this then the 7747 R2 and 10 day Raff channel top is the next area of note, and may well see a stutter.
Generally it all looks set for a positive start to the year, with support at the 7660 level for any dips down that may occur. On the daily chart there is strong support at the 7526 area, not that I am expecting us to dip that low today, but we may well see a dip down later this week to the supports ready for a further push higher. The S&P failed to make it above 2700 at the end of last year, with a sharp drop on the final trading day, as worries over NK and Iran came to the fore. They have regained some ground on the futures in the US, and I am looking to see if the bulls can break the 2683 resistance leveller a push higher. That is the resistance level to watch on the S&P for today.
Back to the FTSE 100, and the only slight spanner in the works is that the daily RSI is currently sat at 81 - of course this is not an entry signal itself and can remain above 70 (overbought) or below 30 (over sold) for a long time while the price continues rise or fall, however, it's worth noting that a reading of 81 flags up a bit of caution - don't fall in love with the upside as they say. Ideally we dip down a bit from the 7720 level to test the 7530 area, maybe even 7450, overbought conditions dissipate and then the bulls are free to push higher.
For today, watching 7720 resistance, and 7660 support.
We may well be on for a more volatile year as well, after a fairly benign 2017 for the FTSE with just a 500 point range.
I wish you well with your trading this year, as ever if you have any questions or comments please do get in touch.
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