The FTSE 100 index has experienced a significant rebound in the past two weeks and is now approaching a key resistance level at around 8400 points.
This level is crucial as it aligns with important technical indicators, including the October high, and is also encountering a bearish oblique that forms the upper limit of a consolidation triangle.
The upcoming days will be crucial for the FTSE 100, as a confirmed breakout above this resistance could signal the start of a new bullish phase.
If the index successfully surpasses the 8400-point mark, investors may target the 9000-point threshold, which represents a potential appreciation of approximately 7% from current levels.
Investor sentiment regarding the global economic outlook will play a significant role in shaping the future performance of the FTSE 100.
Positive economic developments in China and Europe, as well as central bank policies and geopolitical factors, can impact equity markets.
The technical analysis of the FTSE 100 suggests that a breakout above the 8400-point resistance could lead to a bullish trend, while a failure to maintain this level may result in a bearish correction.
Traders looking to capitalize on potential upward movements may consider a buy entry above 8400 points, with a target set at 9000 points and a stop-loss at 8200 points.
The interplay of technical indicators and external economic factors will be critical in determining the trajectory of the FTSE 100 in the coming weeks.