How FTSE 100 can rise 200 points this week

FTSE for this week (FTSE:UKX)

If you need cheering up as a result of the deluge of political drivel, why not try adding technical indicators to charts.

Like Christmas tree ornaments they cheer up an otherwise boring outlook - except for one rather important detail which is now making itself known.

We do not use any technical indicators, though if we had to use just one, Stochastic can sometimes prove useful, though they do need to be "tuned" separately for each instrument.

The important detail relating to the FTSE 100 is now a longer term 7,720 points.

Unlike election promises, this is obviously not graven in stone, but moves in the last week have proven fairly interesting with the highest high ever on the market.

This creates the scenario of near-term growth above 7,535 provoking an initial 7,560 which, if bettered, makes 7,720 a reasonable competent ambition.

The problem? The FTSE needs to slither below 7,315 to scupper the chances, which is one heck of a wide-stop position.

If trouble is planned in the week ahead, below 7,420 looks capable of 7,350 initially - not a trend-threatening ambition, but we'd be alarmed with anything below 7,350 as a further 100 points down could quickly make themselves known.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.