The UK 100 stock index (cash) has been experiencing a downturn for the past six trading days, with the price dropping significantly to reach a critical support level of 8,110. The failure to surpass the key resistance area of 8,300 and the important resistance line from February 2022 has raised concerns about a potential negative reversal from the record high of 8,476. This downtrend is further confirmed by the bearish cross of the 20- and 50-day simple moving averages (SMAs), as well as the RSI and MACD indicators signaling a clear bearish bias.
Technical Indicators
The RSI is currently below its 50 neutral mark, indicating a weakening bullish momentum. Additionally, the MACD is falling below both the zero and signal lines, further supporting the bearish outlook. Despite the index being near the lower Bollinger band and the stochastic oscillator entering oversold territory, suggesting a potential pause in the bearish phase, a break below the 8,110 support level could lead to a more significant downturn towards the April’s constraining region of 7,987.
Future Outlook
To reverse the current bearish trend, the bulls need to push the index above the triangle formation and breach the resistance at 8,300. This would likely attract more buying interest towards the 8,360-8,400 barrier. However, before reaching these levels, the index must overcome the challenge of the 20- and 50-day SMAs at 8,212 and 8,245, respectively. Long-term traders are advised to wait for a confirmed bullish trend by surpassing the crucial resistance line at 8,522 before targeting the psychological mark of 8,600.
The UK 100 stock index is currently facing significant downward pressure, with multiple technical indicators pointing towards a bearish continuation. Traders should closely monitor the key support and resistance levels mentioned above to gauge the market sentiment and potential future movements.
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