Footsie bounces off of strong support.

01/02/2021

British stocks have been underperforming lately, which is a bit strange, considering their lockdown is one of the hardest. 

The FTSE 100 index was down 8% from its January peak, but on Monday, the index was trading 1.5% stronger during the US session, last seen at around 6,500 GBP.

It looks like the 6,400 GBP level was strong support, which sent the Footsie higher. As long as the index trades above that level, the short-term outlook seems bullish.

Another buying level could be spotted at January's lows near 6,300 GBP.

Alternatively, the first target for bulls seems to be at Friday's highs of 6,545 GBP, and if broken to the upside, a further rally toward 6,645 GBP could occur. 

The medium-term trend still seems bullish, but the index needs to return above 6,700 GBP to clear out some traders who are shorting the market.
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