Thursday, 2 April 2009

FTSE breaks above a key retracement level

European equity investors are showing plenty of enthusiasm in trading on Thursday morning. The UK's FTSE index has made a rather striking reversal over the last few sessions.

Just last Thursday the index dropped sharply to the 3760 level but with a 3% plus move already in place today the index could well be on course for its first close above the 50% retracement level from strategic highs and lows observed over the last several months.

The swing high has been chosen at the 4640 level which was a pivot in early November 2008 and also marked the top after the end of year/early January level and the swing intraday low was taken as 3564 seen on March 9th.

The next probable target for the bulls would be the 4200 level but I would not expect us to slice through that without a struggle. Traders in the UK seem to have been cheered by reports from the Nationwide Building Society showing that for the first time in 16 months there was an increase in home prices. Now the guessing game is going to be - how much have UK traders already discounted of glimpses of the first green shoots since the sizable move off the March lows.

1 comment:

  1. Yes the last week or so has been a welcome come for day traders and indeed investors alike with global markets showing positive signs of recovering and with news coming in that the meeting of the G20 nations have pledged trillions of dollar to tackle reccession it means there is something to look forward to the coming weeks shall be ones to look forward and a great time to be back with day trading.