FTSE 100: This event just started alarm bells ringing
The blue-chip index is ending a tough week on a high note, but how can it escape the drop cycle?
3rd May 2019 09:04
The blue-chip index is ending a tough week on a high note, but how can it escape the drop cycle?
FTSE for FRIDAY (FTSE:UKX)
As for the FTSE 100 index for Friday, a glance at the bigger picture reveals something fairly alarming. During April, the UK market exceeded the downtrend for the last 12 months, flounced around but failed achieve escape velocity, and now has retreated below the blue trend. In addition, the FTSE has broken the immediate red uptrend for 2019.
In plain English, we're not optimistic as the UK index requires to exceed 7,433 to regain confidence!
If taking a shot in the dark short position, betting on our political leaders competence, this affords a "fairly reasonable" stop loss level, given the UK closed Thursday at 7,351 points.
Near term, it appears alarm bells will be justified, if the FTSE trades below 7,338 points as reversal to an initial 7,311 makes sense. If broken, our secondary calculates at 7,240, a point at which we'd hope for a bounce. We'd be remiss if we failed to point out the FTSE is once again trading in a region where 6,750 makes sense for the longer term.
It's always difficult to be confident about long potentials, when a market has entered a reversal phase.
Often, despite triggers being met, a share will only achieve our initial "safe" target with any rise withering before the secondary target level.
At present, the FTSE requires above 7,395 to indicate miracle recovery to 7,433 points initially (insufficient to escape the drop cycle). If bettered, secondary is at 7,502 and visually quite believable.
Have a good holiday weekend.
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.
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