Britain's FTSE bounces back, housebuilders lead

* FTSE 100 up 0.8 pct, bounces off technical support

* Index set to test Feb high -ING

* Housebuilders lead gainers on bullish Deutsche Bank (Xetra: DBK.DE - news) note

By Francesco Canepa

LONDON, April 9 (Reuters) - Britain's top share index staged a technical bounce on Wednesday, helped by a rally in housebuilders as analysts flagged buying opportunities in shares that have underperformed recently.

The FTSE 100 shed 1.6 percent over the previous two days but charts showed the trend for the index remained up and investors were still prepared to buy into market dips, betting a recovery in the global economy would support shares.

The FTSE was up 50.85 points, or 0.8 percent, at 6,641.54 points by 1040 GMT, bouncing from technical support corresponding to its 200-day moving average and the 61.8 percent retracement of its February rise.

It was now testing its 50-day moving average at 6,653 points, a break above which could pave the way for a rise towards the index's February peak at around 6,860 points.

"We're still seeing a series of higher lows, which is somewhat promising," said Roelof-Jan Van den Akker, senior technical analyst at ING.

"We're now trying to break through the 50-day moving average line ... and I expect this will happen in the next few days, followed by a break above the recent peak at 6,706 for another rally towards strong overhead horizontal resistance at 6,840."

Among specific sectors, housebuilders were buoyed by a bullish note on the sector from Deutsche Bank, traders said, with the investment bank saying their sensitivity to interest rates has been overestimated.

Barratt Developments (LSE: BDEV.L - news) led blue chips higher with a 2.8 percent rise, while among midcaps Taylor Wimpey (LSE: TW.L - news) added 2.6 percent and Bovis Homes (LSE: BVS.L - news) climbed 0.5 percent, as Deutsche Bank named the trio its top picks.

The Thomson Reuters UK Homebuilding index had fallen 13 percent from its February peak, compared with a 4 percent fall for the FTSE.

The sector index had doubled in value during the past three years, underpinned by tight supply and British initiatives to spur the job-intensive sector, such as the 'Help-to-Buy' mortgage scheme.

Technology stocks were also back in demand on Wednesday, with ARM Holdings (LSE: ARM.L - news) up 2.4 percent and Peppa Pig owner Entertainment One (LSE: ETO.L - news) up by 5.6 percent, making it the second-biggest mid-cap gainer.

They mirrored advances in the tech-heavy U.S. Nasdaq , which recovered some of its poise after worries about over-valuation triggered the index's steepest three-day drop since November 2011.

Fresh tensions over Ukraine may cap any gains for now, however, after the United States accused Russian agents on Tuesday of stirring separatist unrest in eastern Ukraine.

"... It feels like we have found a bottom for now, although events in Ukraine might keep investors wary of dipping their toes back in," Sanlam Securities head of trading Mark Ward said.

Some analysts reckoned on a period of consolidation for the FTSE 100, at least until the new reporting season gets fully underway. Aluminium group Alcoa (NYSE: AA - news) kicked off proceedings in the United States last night, reporting earnings ahead of expectations even though revenues missed forecasts.

"It's very possible we'll be treading water now until such time as the Q1 reporting season really kicks in," said Richard Hunter, head of equities at Hargreaves Lansdown (LSE: HL.L - news) .

"We've been waiting for some kind of catalyst to drive the market forward again, and hopefully it's something that we might see from the Q1 reporting season." (Additional reporting by Tricia Wright; Editing by Catherine Evans)