The recent slide on FTSE 100 was enough to push the UK’s stock index below critical support on the monthly chart. Trading at 6,740, the index is trading below the rising trend line (from connecting the lows of March 2009, February 2016, and January 2019) and the 200 SMA. Concerns about the coronavirus outbreak are to blame for the 10.51% drop in the FTSE 100 last week.
If the market’s optimism is sustained, we could see the FTSE 100 trade higher. However, it’s worth pointing out that on the weekly time frame, gains on the index may be limited at 6,922.2. For one, this price coincides with the broken trend line. On top of that, the 38.2% Fib level aligns with this price when you draw the Fibonacci retracement tool from the high of January 19 to last week’s low.