HMSO - 1012.00p .. the 18 yr 'all-data' chart below, clearly shows the 'strong uptrend' that has been in place for the last 3 yrs, and I am a strong believer in the phrase 'let the trend be your friend'.
The first danger for the 'uptrend', would have been the strong resistance of the 1989 peak of around 825.00p .. and yet the price moved even more strongly up through this level .. and having spent most of 2005 ranging between around 825.00p - 925.00p, it shows that its 'previous resistance peak' has now reversed to a 'strong support level' ... The chart also shows that the price has been in a slightly 'rising channel', so there has never been any danger of the 825.00p support level failing.
If the breakout of a 'substantial range' or a 'key level', is carried out with strong moves and increased volume, this usually confirms that it is a strong breakout, and suggests that further rises will follow .. and this was the case when the 'range breakout' occurred in early Nov.
With the price moving up into 'unchartered territory', there are no 'historical resistance levels' to worry about .. just the 'psychological levels' .. and they don't come much bigger than the 1000.00p level, so it was not surprising that the breakout move was halted at this level.
However, the price retained most of its recent gains, and immediately settled into a brief period of consolidation, in close striking distance, and having rebuilt its strength, it has now produced a strong breakout of the 1000.00p level, with increased volume .. once again confirming the breakout. The price is now testing that the 1000.00p level has reversed to a strong support level, before making its next upward move .. and I would expect to a strong uptrend develop as it moves away from the 1000.00p level.
To summarise ... go with the flow .. cos there ain't no signs of it stopping yet !!
As usual, just the unbiased thoughts of a non-holder.
