FTSE 100: the index strikes back

As the blue-chip index returns to bull territory, our chartist assesses prospects.

FTSE Big Picture yet again (FTSE:UKX) 

Our report for Monday of this week provided some pretty sceptical upward potentials for the UK index, all from a Big Picture perspective.

We truly did not expect them to trigger, but the market closed at 6,115 overnight, safely above our initial target of 6,098 points.

• FTSE 100 forecast: the numbers that really matter

When reviewing the market, it's difficult not to exhibit enthusiasm for the immediate future. The market has made a movement which shall prove difficult to reverse, unless some bad news is waiting in the wings.

Who knows, we're nearly at May and surely the world is planning another flavour of crisis to hit!

The immediate situation is truly surprising as we're able to calculate movement now above 6,130 should attempt an initial 6,285 points.

Despite some hesitation looking possible at such a level, we've no choice but to regard 6,501 points as presenting a strong future attraction.

Further up the food chain, we can even calculate a distant (and dangerous) potential of 6,765 points eventually.

We need to explain why such a level is dangerous.

Visually, it meets (ish) the point at which the UK index broke the red uptrend from 2016. Should the current recovery prove to be a "gotcha" game, this will represent an ideal point sometime in the future for another reversal cycle to establish itself.

It's worth remembering the FTSE needs to regain red on the chart to utterly scrub our vile drop potentials and at present, we're unable to provide a solid argument favouring such a level of recovery.

Instead, if it were a share, we'd be worrying about a price threatening a dead cat bounce.

As usual, we've given a positive argument, well seasoned with scepticism. If things intend go wrong again, the earliest warning signal presently looks like movement now below 5,910 points.

Such a reversal risks triggering reversal to 5,700 and below.

Source: Trends and Targets. Past performance is not a guide to future performance.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.