FTSE forecast: UK stocks rally

The FTSE 100 index has come under pressure in the wake of the multiple midsized bank failures in the US, and, not to mention, the inevitable sale of the beleaguered Credit Suisse. The index outperformed other major indices towards the latter stages of 2022 and the early trading weeks of 2023 but the direction of travel has not only changed, but it has changed rather quickly.

FTSE price action shows a sizeable intra-day reversal that now has the index testing the 200 day SMA, this time as resistance. Further upside potential appears via the 7513.50 and 7617 (December high) markers. The recent pullback offers FTSE bears more attractive levels to assess bearish continuation setups.

The RSI shows prices coming back form oversold territory, where a potential extended pullback ought to see the index move further into the normal range. Levels of interest for further selling include the 7295 (20 December low) and the crucial 7170 level which acted as a pivot point for the index multiple times throughout 2022.

Fidelity Special Values PLC (LON:FSV) aims to seek out underappreciated companies primarily listed in the UK and is an actively managed contrarian Investment Trust that thrives on volatility and uncertainty.

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