The UK’s FTSE 100 index has come through recent earnings with flying colours. One final push from the bulls may be enough to set a new 2021 record.
The biggest threat to the FTSE 100 may be in the rearview mirror. Over the last two weeks, some of the biggest names have released their second-quarter and first-half trading updates. Whilst some constituents are yet to report, heavyweights such as BP, Barclays and Royal Dutch Shell have all reported impressive earnings.
This has helped the index gain 3% in August and more than 6% from July’s low. Although yesterday, the FTSE 100 fell short of clearing June’s £7,212.80 high, reaching £7,212.58 before closing at £7,207.40.
However, a continuation of strength in the final two days of this week should be enough for the Index to break higher, and if it does, £7,500 may soon follow.
The weekly chart shows the FTSE is gaining in upside momentum and may soon clear the resistance at £7,212.80. Furthermore, the weekly moving averages are all supportive and trending higher.
A decisive clearance of the immediate resistance brings a descending trend line at £7,500 from the May 2018 high into view. This is a significant resistance level, although its clearance would still leave the index needing a gain of 400 points to threaten the ATH of £7,909.
The UK stock market is lagging behind those of the US, which have set several records this year. Therefore, it’s by no means fanciful to suggest the FTSE 100 may eventually do the same.
The bullish view holds as long as last month’s £6,787 is sustained. However, should the FTSE fall below this level, the outlook will turn sharply negative.
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