This article is written exclusively for Investing.com
It hasn't had the same success as some of the other major global indices since everything bottomed out last March. While the US and other major indices have repeatedly hit record highs, the UK index has risen steadily, before slipping into a wide consolidation range in recent weeks. Even some of the mainland European indices, including the French and Germans, hit new highs until the Delta variant of COVID-19 raised concerns about a washed-out holiday season, hurting some stocks in the travel and hospitality sector.
But the long wait may be over for the FTSE. The UK index looks like it's finally ready to enter.
The weekly chart of the FTSE shows that the index has been knocking on the main resistance around 7140 for some time, and each time it fell back, the downtrend was gradually shallower:
As the bulls continue to break down the resistance, it will most likely soon recede, potentially leading to renewed technical buys above it.
If we get a lift here, which I'm guessing, there isn't much resistance to the base of last year's outage around 7400, meaning the potential upside could be huge. But soon we might even be talking about a move north of last year's high of 7690, possibly ahead of a new all-time high past the 2018 peak of 7903.
There is clearly another long way to go, and a lot could change, but a weekly close break above the 7140 resistance could trigger that potential move.
But let's take it step by step and zoom in on the daily time frame to study price action in more detail and highlight a few short-term levels:
On this daily chart, the index continued to find buyers each time it fell to test the trendline. The fact that despite Wednesday's bearish-looking candlestick there was no downward follow-up, and the fact that we have now broken above it, is yet another sign that bearish signals are failing sellers.
The bulls sense this weakness from the sellers and are likely to attack the bears in the area above the resistance of 7140, then quickly target the June high at 7217, before the next 7275. The latter marks the January 2020 low, before knocking out that level in last February's big sell-off. Once support, it may offer some resistance if and when the index tests it from below.
In general, the technical outlook looks positive for the FTSE and indeed for other major indices. From a trading standpoint, until a clear reversal pattern is observed, it makes sense to keep looking for bullish rather than bearish short-term trade setups.
