FTSE 100: Breakout Confirmed—What’s Next for the Rally?
The FTSE 100 has finally broken through to new all-time highs, but now comes the real test. Can momentum carry it even higher, or is a consolidation phase on the horizon? With the index in uncharted territory, let’s break down the key technical levels and sector performance driving this move.
Structure Analysis: Why This Breakout Matters
The FTSE’s recent price action has underlined the importance of structure analysis—the study of key support and resistance levels and how price reacts around them.
At the start of the year, the index faced multiple layers of resistance. Several minor swing highs clustered around the 8,400 level, reinforcing the importance of this zone. Add in the May 2024 all-time high, and you had a significant technical barrier. That barrier was shattered in mid-January when the FTSE burst through resistance with strong momentum.
However, what followed was even more important. Instead of a sharp pullback, the market consolidated near the highs, a clear sign that sellers were struggling to regain control. A brief one-day dip tested the broken resistance zone—but buyers quickly stepped in, turning old resistance into new support. That’s the hallmark of a strong breakout.
Now, with the FTSE pushing into uncharted territory, traders are turning to Keltner Channels for guidance. The index has been using the upper Keltner Channel (a 2.25 ATR band around a 20-day EMA) as dynamic resistance. Meanwhile, the 20-day EMA and the broken resistance zone are providing support. This creates a well-defined range for swing traders and trend continuation setups—watching for either a clean breakout or another support retest.
FTSE 100 Daily Candle Chart
Past performance is not a reliable indicator of future results
Who’s Leading and Who’s Lagging?
While the FTSE’s breakout is a broad-market story, not all sectors are participating equally. The rally has been powered by Financials (+11.68%) and Tech (+14.86%), two sectors that have historically struggled for leadership in the UK market. Their strength has been enough to offset weakness elsewhere.
Meanwhile, Healthcare (+7.33%) and Industrials (+3.83%) have added steady support, while Energy (+2.82%) has held up despite recent weakness in oil prices.
On the other end of the spectrum, Materials (-6.70%) and Real Estate (-6.31%) have been clear laggards. This suggests that materials and real estate stocks are struggling under the weight of higher interest rates and global growth concerns—factors that could continue limiting upside unless sentiment shifts.
This divergence raises an important question: is there a rotation trade coming? If lagging sectors start to find support, we could see the rally broaden out, giving the FTSE further upside. If not, continued gains will depend on Financials and Tech holding their leadership role.
UK Sector Snapshot (3-Month)
Past performance is not a reliable indicator of future results
What’s Next?
With the FTSE now testing dynamic resistance, the battle between trend continuation and consolidation is in full swing. If the index breaks above its upper Keltner Channel, momentum traders may look for an acceleration higher. If resistance holds, the broken 8,400 resistance zone and the 20-day EMA will be key levels to watch for potential support.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Structure Analysis: Why This Breakout Matters
The FTSE’s recent price action has underlined the importance of structure analysis—the study of key support and resistance levels and how price reacts around them.
At the start of the year, the index faced multiple layers of resistance. Several minor swing highs clustered around the 8,400 level, reinforcing the importance of this zone. Add in the May 2024 all-time high, and you had a significant technical barrier. That barrier was shattered in mid-January when the FTSE burst through resistance with strong momentum.
However, what followed was even more important. Instead of a sharp pullback, the market consolidated near the highs, a clear sign that sellers were struggling to regain control. A brief one-day dip tested the broken resistance zone—but buyers quickly stepped in, turning old resistance into new support. That’s the hallmark of a strong breakout.
Now, with the FTSE pushing into uncharted territory, traders are turning to Keltner Channels for guidance. The index has been using the upper Keltner Channel (a 2.25 ATR band around a 20-day EMA) as dynamic resistance. Meanwhile, the 20-day EMA and the broken resistance zone are providing support. This creates a well-defined range for swing traders and trend continuation setups—watching for either a clean breakout or another support retest.
FTSE 100 Daily Candle Chart
Past performance is not a reliable indicator of future results
Who’s Leading and Who’s Lagging?
While the FTSE’s breakout is a broad-market story, not all sectors are participating equally. The rally has been powered by Financials (+11.68%) and Tech (+14.86%), two sectors that have historically struggled for leadership in the UK market. Their strength has been enough to offset weakness elsewhere.
Meanwhile, Healthcare (+7.33%) and Industrials (+3.83%) have added steady support, while Energy (+2.82%) has held up despite recent weakness in oil prices.
On the other end of the spectrum, Materials (-6.70%) and Real Estate (-6.31%) have been clear laggards. This suggests that materials and real estate stocks are struggling under the weight of higher interest rates and global growth concerns—factors that could continue limiting upside unless sentiment shifts.
This divergence raises an important question: is there a rotation trade coming? If lagging sectors start to find support, we could see the rally broaden out, giving the FTSE further upside. If not, continued gains will depend on Financials and Tech holding their leadership role.
UK Sector Snapshot (3-Month)
Past performance is not a reliable indicator of future results
What’s Next?
With the FTSE now testing dynamic resistance, the battle between trend continuation and consolidation is in full swing. If the index breaks above its upper Keltner Channel, momentum traders may look for an acceleration higher. If resistance holds, the broken 8,400 resistance zone and the 20-day EMA will be key levels to watch for potential support.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.