A decent rally yesterday has the FTSE approaching its MA 20 and MA 50 which are located near 5360 on the daily chart. We discussed this is an area where the FTSE would want to pull back to after over sold conditions. After large sell offs and rallies, markets like to trade back to these regions. 5360 is also a previous area of resistance/support which we have used in previous months. So we have confluence around this region. For now whilst the FTSE trades below this level the index is bearish and target lower prices. If we trade above here then the index will turn short term bullish.
As its dividend Tuesday we may have a strong open and there is a previous gap which the index will be attracted to.
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