Footsie rockers higher toward previous lows


It looks like drastic lockdowns are indeed bullish for equities as the FTSE index goes vertical after the UK announced a new lockdown in the country, where everything non-essential will be closed.

Since then, the FTSE 100 index is up nearly 4% in two days.

On Tuesday, the index was trading 2% stronger, last seen at around 5,765 GBP.

It looks like the FTSE index will retest previous strong support (now resistance) of September and October lows, located near 5,780 – 5,800 GBP. If the index rises above this level, it could be a strong bullish signal, and the medium-term trend might change to bullish, targeting the bearish trend line near 6,000 GBP.

Alternatively, daily support now stands near 5,720 GBP, and while the index trades above it, the short-term outlook seems bullish.

As ridiculous as it sounds, the more economic damage, the higher the stock markets can go as central banks and governments will start pumping more money. Therefore, in a world with deep depression, equities could be soaring to new highs. Great!
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