On Friday morning 16th April we were anticipating a comment along the lines of ‘the 5770 level resistance has been broken and all that is now needed is another week of the same or higher prices to confirm the breakout’!
Then, on Friday afternoon, the US SEC dropped its ‘fraud’ bombshell on Goldman Sachs; Wall Street fell off and, of course, the FTSE had to follow.
So we are back to noting that the 5770 on the FTSE 100 is still playing its resistance role. Friday’s sell off looks to have been something of a knee jerk reaction and was not of major proportion. The dominant trend is still the Uptrend so there is every chance that the markets will resume their slow upward course during the coming week or the next and this should take the FTSE on up towards a test of the 6160 level area.
The alternative scenario is that last week could form the top of the recovery rally and could be the start of a longish retracement in share prices but there is really no solid evidence that this might be the case and so, on current evidence, we expect no more than a shallow correction at worst.
The FTSE 100 –
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