Interactive Investor

Can the FTSE 100 reach an all-time high?

It's been a lacklustre few weeks for the FTSE 100 index. Our chartist asks if this is about to change.

21st February 2020 09:48

Alistair Strang from Trends and Targets

It's been a lacklustre few weeks for the FTSE 100 index. Our chartist asks if this is about to change.

FTSE for FRIDAY (FTSE:UKX)

The period since the Brexit vote has proven to be quite stagnant from a FTSE 100 perspective. Essentially, the market has produced a horizontal line at 7,215 points, moving above and below but generally staggering back to the flat line.
 
Thus far every attempt to break this hiatus has failed, with the UK index requiring movement above 7,850 to give a realistic signal for coming real growth.
 
We can calculate an initial 7,950 with secondary at 8,200 points.
 
Alternatively, weakness below 7,070 will probably give early warning for an iceberg ahead, taking the market into a zone with 5,850 looking like an attractive drop target!
 
The usual rules when this sort of nonsense appears tell us to judge matters from a big picture perspective.

Source: Trends and Targets      Past performance is not a guide to future performance

Given this excruciatingly boring period commenced with an all-time high on the FTSE, the suggestion is to expect the best.

Therefore, if we treat the FTSE in a similar fashion to a share, apparently 8,200 has become a believable ambition! Time will tell.

Closer to home, the final 30 minutes of trade on Thursday saw the FTSE experience a near 50 point reversal, giving an otherwise lacklustre day a pretty solid kicking.
 
It has created the situation where weakness continuing below 7,442 points (Not as an opening second drop spike!) could generate traffic down to an initial 7,417 points. If broken, secondary comes in at 7,375 points.

However, if the drop was as contrived as it felt, more probable appears to be strength beyond 7,470 leading to an initial 7,492 points.

If exceeded, secondary calculates at 7,512 points. Balancing this, recently Friday's tend to be pretty useless and we'll not be surprised to witness a bounce at 7,417 points anyway.

Source: Trends and Targets      Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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