That was a strong start to 2017, with the FTSE 100 testing the 7200 level twice, but failing to hold above it on both occasions. Despite a pretty weak US session which saw the S&P 500 fall from 2264 to 2244, the FTSE remained fairly strong, only dipping to 7180. That shows that the bulls still have the momentum and the power for the time being.
However, we do have the top of the 10 day bianca channel at 7190. Overnight, the S&P bounced back to 2260, but the top of the 10 day bianca channel is 2261. With the daily RSI not he FTSE at 82 now, I am thinking that a dip to 7025ish before another leg up would play out pretty well.
FTSE 100 Outlook and Prediction
The key to today will be if the bulls are able to break the double top from yesterday at 7206. If they can, then a rise to 7255 and possibly 7271 looks possible. It tested that 7206 twice yesterday so a third test today would likely see it break. There is initial resistance at 7222 where we have R1 and the top of the 10 day Raff channel, and with the daily RSI testing 82 currently. the top of these daily channels (7222, 7256) are likely to see some shorting. That said, this move up is pretty strong still with the momentum still with the bulls.
Support initially is at the daily pivot at 7171, though if this breaks then the 200ema at 7136 on the 30min is the next area - we also have S1 here. Below this then 7090 is still the key line in the sand, as a break below this changes the picture to a fairly bearish one. That said, the bottom of the bianca channels are at 7147 (10 day) and 7116 (20 day) so likely see some support here on any moves down.
The key at the moment is not to fall in love with the upside, as shown by the S&P yesterday - there are still some bears around even if they can't currently make the turn down stick. On the FTSE, I am watching the 7255 and 7271 areas closely for the rise to start running out of steam. Though of course it can still break through them, so stay nimble.