The overall idea of market participants looking for dips as potential value is the best way to play this market
The FTSE 100 has pulled back a bit during the trading session on Wednesday to show signs of choppy behavior yet again. This is a market that has no idea what it exactly wants to do, but at this point in time I do believe that we are still very much in an uptrend. Because of this, I think we need to look at this as a scenario where we continue to see buyers underneath, and I think that the 50 day EMA could be where a lot of buyers would show up. Currently, this is near the 6620 level, and of course we have the psychology of the 6600 level just underneath there.
The FTSE 100 has gotten a bit of a boost due to the idea of the UK economy opening up much quicker than several other ones, as the vaccination program in Great Britain has been much better than most of its neighbors. After 30 million people have had at least the first shot, the idea is that the economy will get moving much quicker than other places like the European Union.
That being said, we look very choppy in the short term, so I think at this point in time you need to be very cautious about the position size if you use, because you could get whipsawed. The candlestick is of course very bearish looking, so I think that we probably have a little bit of pullback in the short term coming, but I still look at that as value. Breaking above the 6800 level would be the first sign of really starting to take off, reaching towards the 6900 level, and then possibly the 7000 level.
To the downside, if we were to break down below the 6600 level, then we probably go looking towards the 200 day EMA, painted black on the chart. It currently sits at the 6430 level, which is just above the 6400 level, an area that has offered a major amount of support in the past. The overall idea of market participants looking for dips as potential value is the best way to play this market from what I see, but I also recognize that we have so much noise out there that you need to be using little bits and pieces of a position and then adding as the market works out in your favor.