Yesterday saw the FTSE end on a low. Our chartist analyses its recovery potential.
FTSE for Friday
As we ponder the end of civilisation, due to global market reversals, it occurs the UK's Brexit shambles is "off the hook" for damaging the stock market.
Or is the UK still secretly a driving force in world affairs, despite woeful political leadership? Last time we had so many shares needing an update in a single day was immediately following the Brexit vote!
There is still some hope the UK will bottom around Thursdays low of 7,020 points. We shall be alarmed in the event 7,007 now breaks, thanks to our immediate drop target calculating at 6,984 points.
If broken, secondary computes at 6906. Hopefully, if this scenario triggers, it doesn't all happen in a single day.
There is a chance Thursdays low of 7,020 shall be deemed "bottom" with the result a rebound could occur on Friday.
It closed Thursday at 7,059 points, needing only above 7,098 points to tick the first "bottom is in" box.
Above 7,098 allows recovery to an initial comfortable looking 7,156 points.
If exceeded, secondary comes along at 7,246 points. The initial ambition would imply a coming bonk against the immediate downtrend. But if bettered, nearly another 100 points will make a lot of visual sense.
We remain a little suspicious over this reversal. A drop at the end of July / start August is fairly normal, as is a surprise recovery which lasts through to September and the end of the holiday season.
On this occasion, the market has certainly retreated further than we'd like but unless 7,007 breaks, some hope exists for recovery soon.
Have a good 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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