The UK 100 index (Cash) has been in a strong negative rollercoaster since the end of February, dropping towards a multi-year low of 4,838. The short-term technical indicators are bearish and point to more weakness in the market. The MACD is heading south below its trigger and zero lines, while the RSI is pointing down in the oversold territory.
The next target is the fresh low of 4,838. At this stage the market could extend its aggressive bearish sentiment towards the psychological level of 4,500 and 4,000 and put in place a lower low.
However, an upside move is likely to find resistance at the 23.6% Fibonacci retracement level of the down leg from 7,690 to 4,860 at 5,512 before challenging the 38.2% Fibonacci of 5,931. Even higher, the downside gap which encapsulates the 50.0% Fibonacci of 6,267 could come in focus.
Summarizing, the market seems to be in bearish mode given that the index trades below the moving averages and has sent prices to a new lower low.
