The UK 100 stock index (cash) has been trending upwards since February. However, the index experienced a minor downside correction lately after its rally peaked at the 20-month high of 7,400.
This recent pullback is unlikely to continue as the momentum indicators suggest that the bullish forces are still in play. The stochastic oscillator is sloping upwards near the 80-overbought area, while the RSI is hovering in the positive region.
Should the buying pressure intensify further, the immediate hurdle for the bulls might be found at the 7,331 level. If the price crosses above this barricade, then the next challenge could be the 20-month high of 7,400. Failing to halt there, the price ascent might stop at the 7,500 psychological mark or even higher at the February 2020 high of 7,560.
Alternatively, should the bears retake control, initial support might be met at the 7,188 and 7,026 levels, where the 50- and 200-day simple moving averages (SMAs) are found respectively. If the price dips beneath these levels, then the next obstacle for sellers could be found at the 6,945 region. Breaching this support point, the price would then move towards the 6,824 barrier.
Overall, UK 100 has been in a long-term upward move. Although the index has given up some ground recently, only a clear move below 7,026 could turn the short-term picture back to negative.