After a strong festive period, the FTSE’s first week of trading in 2024 resembled something of a damp firework…
Having rallied from the support zone in late October all the way to the resistance zone in mid-December (see chart below), the FTSE has stalled and in recent sessions started to retreat. We’ve seen the market reject resistance five times in less than a month – indicating that FTSE bulls are starting to take profits.
It’s worth noting that the dominant market structure on the FTSE is a sideways range which has been in place since the summer. Until we see the market break and hold above the resistance, we can assume that the range will remain in play.
FTSE 100 Daily Candle Chart Past performance is not a reliable indicator of future results
Lower Swing Highs Form on Hourly Candle Chart
Examining the hourly candle chart reveals a bearish sequence of lower swing highs after the recent rejection of resistance. In the short term, the market has found tentative support, but a breach could trigger increased selling pressure.
FTSE 100 Hourly Candle Chart Past performance is not a reliable indicator of future results
Sector Snapshot
At the sector level, we have seen a ‘risk-off’ positioning emerge over the last seven sessions. Defensive sectors such as Healthcare, Utilities and Consumer Staples have been leading the market. While aggressive sectors linked to the anticipation of lower interest rates such as Materials, Consumer Discretionary and Real Estate have erased some of their December gains.
UK Sector Snapshot (7 Days) Past performance is not a reliable indicator of future results
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