The UK 100 cash index is finally recording a green candle today after seven consecutive red candles that pushed it towards the 7,200 region. It tested the March 20, 2023 low at 7,205 for the second time, but the bears proved powerless to record a new 2023 low, opening the door to the current rebound.

Despite the Average Directional Movement Index (ADX) trading a tad below the early-June high and signaling a strong bearish trend in the market, the remaining momentum indicators are starting to reveal some early sell-off exhaustion signs. In more detail, the RSI appears to edge higher, pointing to reduced bearish pressure in the market. In the meantime, the stochastic oscillator is stuck in its oversold territory but possibly preparing to test the support set by its moving average (MA). A potential move above its MA would be seen as a bullish signal.

Should the bears decide to continue their push lower, they would come up against the 7,205-7,217 range that is defined by the March 20, 2023 low and the 61.8% Fibonacci retracement level of the October 13, 2022 – February 16, 2023 uptrend respectively. If successful, they could have the chance of finally recording a new 2023 low and then test the April 16, 2015 high at 7,127.

On the flip side, the bulls are desperate for today’s green candle to result in a more sustained upleg. The first key resistance would come at the April 21, 2023 downward sloping trendline, a tad below the 50% Fibonacci retracement at 7,375. They would then set their eyes higher at the 7,501-7,533 area, which is populated by the 50-day simple moving average (SMA) and the 38.2% Fibonacci retracement. However, the bulls’ main target appears to be the busier 7,599-7,703 range.

To sum up, the UK 100 cash index bulls could crack a smile today, but they probably need a decisive move about the 7,375 area for today’s green candle to potentially morph into a new short-term bullish trend.