Bloomberg News

FTSE 100 Will Rise 12% If it Breaks Resistance Level

December 20, 2012

U.K. stocks will rally 12 percent if the benchmark FTSE 100 Index (UKX) clears a resistance level that has held since February 2011, according to a technical analyst at Taler Asset Management.

If the gauge can breach the 6,100 level, the next level of resistance would be at 6,700, last reached in mid-2007. The measure rose 0.4 percent to 5,961.59 yesterday, its highest in nine months, amid optimism that U.S. lawmakers are making progress towards a budget agreement.

“The upside potential for the FTSE index is limited to that area of resistance between 5,900 to 6,100,” Julius de Kempenaer, a senior technical analyst at Taler Asset Management Ltd. in Gibraltar, wrote in an e-mail. “A break higher, preferably beyond the cluster of highs that was set in the beginning of 2011, would open up a lot of fresh upside potential that could take the FTSE back to the peak levels seen in 2007.”

While the index tested the 6,100 level in mid-2011, it failed to close above the resistance, de Kempenaer wrote. A decline below the recent November low of 5,600 would negate the bullish scenario, he wrote.

In technical analysis, investors and analysts study price graphs to predict changes in a security, commodity, currency or index.

To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus