Here's how the FTSE 100 can continue its powerful recovery

The market continues to push higher despite Covid-19. Our chartist reveals his price target.

FTSE for FRIDAY (FTSE:UKX) 

The market continues to behave as if Covid-19 was all a bad dream and can be forgotten. This week's 'result' of the UK achieving a higher death toll than the rest of the EU combined certainly gave pause for reflection.

The FTSE 100 appears to have embraced the delusion, still looking to have some fairly strong potentials in the next few weeks. 

Of course, as is our inclination, we have spotted a little problem in the future.

At present, the big picture claims the market intends to continue its powerful recovery, hinting we should hope for 6,732 to make an appearance.

By any standards, this will prove a strong bounce from the lows of 4,890 but the 'nerd element' in-house points at a pretty major issue. 

Firstly, achieving 6,732 is a major target level, one at which we would normally anticipate some turbulence.

Secondly, it almost exactly matches the point of 'trend break', when the uptrend from March 2009 was broken in March 2020.

• Why this is a massive day for the FTSE 100 index

From a movement perspective, this fairly major issue risks raining on the FTSE parade.

On 6 March 2020, when the critical uptrend broke, the market broke the red line at roughly 6,753 points.

At present, we are projecting a movement potential which fails to better the point of trend break, and this is liable to be troubling, meaning the FTSE many fail to achieve a safe higher high and find itself in a position where any negative news shall prove capable of forcing some pretty vile weakness.

Despite there only being a few points difference between our recovery ambition and the point of trend break, this sort of nonsense tends to cause trouble more often than we would like to admit.

Essentially, once a price recovers above the point of such an important trend break, it meets the first criteria for higher highs and gives considerable hope for the future.

It is difficult not to wonder, with politicians again gathering at the trough, schools returning, and lockdown easing, whether we face a resumption of hostilities again in a few weeks with virus numbers again increasing.

This risks a perfect storm, if it coincides with the FTSE approaching the 6,732 level.

Nearer-term, the FTSE is looking quite hopeful for Friday.

Apparently moves next above 6,403 points should harbour thoughts of an attempt at 6,444 points.

If bettered, secondary calculates at 6,482 points. If triggered, the tightest stop is at 6,314 points, painfully wide.

To make things more palatable, even above 6,388 points now looks capable of triggering the upward movement.

As always, there is a reverse side of the coin for the near-term. Below 6,314 looks capable of triggering reversal to 6,289 points.

If broken, secondary works out down at a surprising looking 6,230 points.

Finally, have a good weekend and cherish it, 'cos we're not due any more market holidays until the end of August, a place which sounds very far away at present.

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.