Commodity stocks dragged down the FTSE 100 index after weak economic data from China.
The rise above June’s peak at 7215 was a sign of commitment from the long side. However, a pullback is necessary to keep the rally sustainable.
The drop below 7175 suggests that buyers took profit when the RSI showed an overbought situation. As the RSI swings back into neutrality, between 7095 and 7120 lies the demand zone which coincides with the 20-day moving average.
A break above 7205 may resume the uptrend.