FTSE At Important Inflection Point After Reaching Key Long-term Support

Since 8 July the FTSE 100 index has fallen over 12% (based on closing prices) and is now at an important inflection point.

The FTSE has been in a longer-term trend channel that it established after the March 2009 low. As the chart below shows, the index has fallen sharply and is now testing key support (circled) where it should bounce if it’s to stay in this uptrend.

If the FTSE breaks down through the green line it will signal a new bearish trend and could ultimately lead to a retest of 3,512 – the closing price reached in March 2009.

 

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