The UK’s leading stock market index recently saw a 400-point decline but has since regained its bullish momentum. A Golden Cross, where the 20 MA moves above the 60 MA, confirmed a strong buy signal. The surge in buying volumes since late last week suggests increased interest from investors attracted by the index's lower valuation.
While the broader uptrend remains intact, a short-term correction is anticipated before the rally resumes. A pullback below the 23% Fibonacci retracement level and closer to the 8200 area, aligning with the critical 38% Fib retracement, could provide a more attractive entry point for buyers. This zone offers an opportunity for those seeking to capitalize on the prevailing bullish momentum with an improved risk-to-reward ratio.
The combination of technical signals and recent price action suggests the potential for continued upward movement following any temporary dip.
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