* FTSE 100 up 0.7 pct, bounces off technical support
* Index set to test 6,840 pts - ING
* Housebuilders lead gainers on bullish Deutsche Bank note
* StanChart rallies as brokers flag cheap valuation
By Francesco Canepa
LONDON, April 9 (Reuters) - Britain's blue chip 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 had shed 1.6 percent over the previous two days. However, charts showed the trend for the index remained up and investors were still prepared to buy into market dips, betting on a recovery in the global economy despite geopolitical tensions in Ukraine and volatility in emerging markets.
The FTSE was up 48.79 points, or 0.7 percent, at 6,639.48 points by 1346 GMT, bouncing from technical support corresponding to its 200-day moving average and a 61.8 percent retracement of its February rise.
It was now facing technical resistance at its 50-day moving average at 6,653 points. A break above that level 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."
Housebuilders were buoyed by a bullish note by Deutsche Bank, which said the sector's sensitivity to interest rates has been overestimated.
Barratt Developments led blue chips higher with a 3.9 percent rise, while among midcaps Taylor Wimpey added 3.8 percent and Bovis Homes climbed 1.4 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, as investors started betting the Bank of England would bring forward an interest rate hike, making mortgages more expensive.
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.
Asia-focused bank Standard Chartered, up 3.5 percent, was also among top gainers, benefitting from an upbeat tone in Asian markets and comments by Bank of America Merrill Lynch and Investec highlighting the stock's cheap valuation.
Standard Chartered's shares, which hit a near two-year low last month, trade at a 7 percent discount to the British banking sector, the steepest since 2010, Datastream data showed.
The stock has rebounded 13 percent in the past month but is still down nearly 30 percent from its 2013 peak, having been pummelled by concerns about a slowdown in emerging economies.
"The message from the management team was overall reassuring," BofA ML sales traders wrote in a note to clients after meeting Stan Chart's outgoing finance director Richard Meddings.
"There is significant room for the stock to run."
Fresh tensions over Ukraine may cap broader market 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 under way. Aluminium group Alcoa 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.
"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 Susan Fenton)