Footsie's big step forward
According to technical analysis, the index has been consolidating within a large symmetrical triangle for 13 years. This includes a high below the 1999 peak, prior to the GFC in 2007, and a post-GFC low that was higher than the low after the dotcom bust.
The index made a recovery from the 2009 nadir, then spent 2010 to 2012 in a smaller symmetrical triangle. In September last year, the index broke through the smaller triangle and almost without faltering pushed back to its longer-term trend line (the upper side of the large triangle) at around 6600 points.
That strong upward movement shows resolute buyer support in the market following the breakout, Clement says.
The Footsie met resistance at the trend line, resulting in a sharp retracing of its path, followed by a quick recovery. That's another bullish signal, which demonstrates buyers overcoming sellers and a preparedness to support the index at current elevated levels.
At the time of writing, the monthly chart is within 2 per cent of the trend line, and moving upwards, indicating another breakout may be imminent. Should that occur, Clement says the index could run quickly towards the 1999 record high where it will likely see short-term resistance.
If it breaks through the old high, it could run towards 8000. Clement forecasts an upside target of 8050 points.
On the downside, if the Footsie does not convincingly break out of the longer-term consolidation pattern, then sellers could take over, pushing it back to the lower trend line, which is about 4000 points.
On the fundamental side, the situation looks optimistic, with investors adopting a "risk on" outlook. That is seeing them move out of gold and bonds in favour of equities, which should help put more thrust under the Footsie as it attempts its breakout.
This column is not investment advice. rodmyr@gmail.com
Frequently Asked Questions about this Article…
The FTSE 100, often called the Footsie, is Britain’s blue‑chip stock index. The article discusses a possible technical breakout after a long period of consolidation and examines whether the index can challenge its 1999 record monthly high of 6,977 points.
Technical analysis described in the article shows the Footsie has been consolidating inside a large symmetrical triangle for about 13 years, with earlier smaller consolidation phases and a clear pattern of highs and lows shaping that long‑term structure.
In September last year the index broke out of a smaller symmetrical triangle and quickly pushed back to its longer‑term trend line at roughly 6,600 points, signalling strong buyer support after the breakout.
Bullish signals noted include the decisive breakout from the smaller triangle, a strong upward move to the long‑term trend line, a sharp retracement followed by a quick recovery—indicating buyers overcame sellers and are supporting the index at elevated levels.
The article says a breakout could quickly push the index toward the 1999 record high near 6,977 points, and if it surpasses that old high it could run toward 8,000 points; the analyst forecasts an upside target of about 8,050 points.
If the index fails to convincingly break out of the long‑term consolidation, sellers could regain control and potentially push the Footsie back down toward the lower trend line of the triangle, which is around 4,000 points.
According to the article, fundamentals look optimistic because investors are adopting a 'risk‑on' stance—moving out of gold and bonds into equities—which could help add momentum behind a Footsie breakout.
No — the article explicitly states it is not investment advice. For contact, the column included the email rodmyr@gmail.com, but readers should treat the analysis as informational and consider seeking personalised financial advice.
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