FTSE 100 must do this to reach 'safety'

Both the UK and French indices have made strong recoveries, but must do more to calm nerves.

FTSE for Friday & France too (FTSE:UKX) 

It's easy to be irritated at the pace of FTSE 100 recovery, especially compared with the US, most of Europe and the rest of the world.

Perhaps it is an inverse relationship to death rates. Even Brazil's bounce from the initial Covid-19 low has outstripped UK performance. France, however, looks a bit problematic, tending to echo the UK's lacklustre performance.

What's interesting us about France is the presence of an important trigger level at 5,195 points. If this market manages to close a session above such a level, some quite strong recovery can be mapped to an initial 5,390 with secondary, if bettered, working out at 5,715 points.

Despite the CAC40 trading at 5,049 (at time of writing), there appears sufficient reason to hope something is changing. 

For France, near-term moves above 5,072 suggest the potential of recovery to an initial 5,175 points with secondary, if bettered, at 5,246 points.

Theoretically, this should propel the index within reach of the 5,195 trigger level. 

As for the FTSE 100, the important level the UK index requires better to attain "safety" is at 6,750 points.

Alas, we're experiencing some difficulty finding sufficient logic capable of exceeding this level. We can calculate fairly close to this level but presently cannot invent an argument capable of bringing the UK market above this ideal point, with gains above 6,750 promising the Covid-19 drop should be left behind as strong recovery becomes possible. 

Near-term, above 6,262 points should provoke a fairly lame looking 6,292 points with secondary, if bettered, a more encouraging 6,330 points.

Overall, we are supposed to believe the overall attraction shall come from 6,385 points.

It is interesting to note the blue downtrend since February has proven more sacrosanct than the border around Leicester. If triggered, the tightest stop looks like 6,198 points.

The alternate scenario threatens of weakness below 6,198 generating reversal to 6,135 points. If broken, secondary is a slightly scary 6,053 points, a move which will hint next week shall be pretty foul on the FTSE.

However, from the point at which the index closed Thursday, it feels like Friday should provide some upward entertainment. In addition, the first F1 race of 2020 is scheduled to happen in Austria (behind closed doors) and thus, optimism is permitted.

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.