Big week for the FTSE 100 as it seeks to beat the bear

For all of the excitement (and worry) generated, the FTSE actually squeezed out a 0.2% gain in February as it finished the month strongly to reach 6,097 – and if the UK’s leading index can make further gains and kick on toward 6,315 it has a chance of fending off the bear market into which it so briefly fell.

One classic feature of any bear market is how an index tends to set a sequence of lower highs and lower lows. 

The chart below shows how the FTSE 100 has so far followed this pattern since it peaked just ahead of last year’s General Election.

This is why this week could be so pivotal. Friday’s rally took the index above its prior closing peak, 6,038 on 22 February, and also where the previous rally had petered out at 6,084 on 29 January.

If the FTSE 100 can make it to where the ultimately failed  year-end run rolled over, at 6,315 on December, then it has a chance of casting aside fears of a sustained bear market, if history and these technical indicators are any guide.

Equally, an unsuccessful attempt to move sustainably beyond 6,084 and then 6,315 could herald a fresh downturn, toward the 11 February closing low of 5,537.

Source: Thomson Reuters Datastream

NOTE: Past performance is not a guide to future performance and some investments need to be held for the long term.

These articles are for information purposes only and are not a personal recommendation or advice.