FTSE 100: is the City index about to jump another 200 points?

The UK’s leading index is booming, so our chartist runs his software to see if a seasonal surge is viable.

FTSE for FRIDAY (FTSE:UKX) 

At Trends and Targets, we're often asked how we produce our target levels, hopefully due to our often devastating accuracy. 

For commercial reasons, we're forced to be vague but there's another reality in play. Very rarely do we apply just one set of formula to a potential movement. 

Instead, we'll look at near-term potentials based on market movements during the most recent month. 

Then we'll zoom out and look at what's been happening during the period since the last cataclysm (think Covid-19 hitting), and finally take a glance at really big picture potentials, sometimes since the beginning of time. As part of this exercise, we question if a price is trading higher (or lower) than any previous highs, along with looking for visual cues on a chart.

At this point, beside boring the reader, there's another factor which requires satisfied. We've got to question whether recent minute by minute movements are tending to reach targets or fizzle out, before target levels are achieved. 

This is an attempt to ascertain whether a market is showing any particular strength, in any particular direction.

Sometimes, the result of all this focus on numbers is a need to just walk away and admit we don't have a blooming clue! 

Other times, such as with the FTSE 100 at present, we start to find hints of direction and will bias our thinking accordingly.

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In this report, the bias is toward potential gains on the UK market, at least until 6,730 makes a guest appearance. 

At such a level, we believe the FTSE may pause for breath, especially as our next major point of interest is around 600 points higher.

For the immediate future, our inclination is to "play it safe" with the FTSE, demanding the index next trade above 6,505 points to enter a cycle toward an initial 6,543 points. 

If exceeded, our secondary calculates at 6,560 points. 

In fact, the index could easily find itself accelerating toward 6,611 points.

If triggered, the tightest stop loss level looks like a reasonable 6,450 points. 

It's fingers crossed time, especially as the market now needs below 6,383 to suggest our optimism is misplaced.

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.