Footsie posts a bullish reversal


Monday's large bullish reversal in the stock markets was really impressive and equities erased sharp intraday losses to close the day notably higher. 

On Tuesday, the index was trading 1.5% stronger during the London session, hovering at around 6,220 GBP. 

Yesterday, there was a nice bullish divergence pattern between the price and the RSI indicator, which helped bulls to push the price higher. A strong buying followed, and the index rose above previous highs of 6,185 GBP. As long as the index remains above this level, the short-term outlook seems bullish.

The latest consolidation/drop could also be interpreted as a double bottom pattern, with the full potential of this pattern circa 250 points. Thus, the Footsie could march toward 6,450 GBP, which is the medium-term target for bulls.

The immediate resistance could be located at 6,230 GBP and afterward at around 6,310 GBP.

Alternatively, if the 6,185 GBP level is broken to the downside, the short-term trend could change to bearish, with the immediate target for decline near 6,100 GBP. 

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