The UK 100 Index is moving lower again today after a horrid selloff on Friday. The retracement from the high at 7900.00 on the 22 of May merged into a sideways consolidation pattern if not an outright bear flag over the last month and we are on the verge of accelerating the move down with a break of support at 7600.00. This level is quite significant as it contains the 50 DMA and is just above the recent swing low at 7589.5. The next support below on the daily chart is the 100 DMA at 7503.6 with the 200 DMA at 7436.6. These levels represent quite achievable targets with 7300.00 being the ultimate target if a bear flag is triggered. Beyond that 7000.00 comes into focus.
The bulls are down but not yet out with the potential for significant supply in the 7600.00 area. A move higher needs to erase Friday’s candle which is a tall order but spread over a number of sessions, it can be achieved. The 7700.00 level represents a minor hurdle while 7800.00 would swing the balance with bearish stops above the level. Building on this success would be a retest of 7900.00 followed by a test of 8000.00. Bulls may wish to take profit if this milestone is reached with higher level becoming targets for later in the year.