Up over 500 points since Christmas, our technical analyst shares his forecasts for the main index.
FTSE for FRIDAY (FTSE:UKX)
The astounding excitement of Brexit talks has captivated us in a week where, once again, nothing really happened!
From where the market closed the session on Thursday, it now appears weakness below 7,093 risks some near-term travel down to an initial 7,048 points. In itself, this isn't terribly alarming but we'll raise an eyebrow should 7,048 break.
There is a very real risk of continued travel down to 6,925 points in such a scenario. The tightest stop position appears to be 7,151 points.
As the chart highlights, even reversal to 6,925 isn't such a grim scenario but we do remain with one really big concern.
The FTSE is still trading in a region where some negative news can drive it to 6,375 in a blink with secondary, if broken, down in the 5,800's. In fact, if this were a share, we'd already assume it intends heading to the 5,800's given the presence of the Brexit vote uptrend.
Sticking to our "if this were a share" approach, the index now requires better than 7,235 points before we dare to take any rise seriously, such a movement taking the market into a region with an initial 7,400 points. Our secondary is at 7,600 points. It can be guessed, if only due to our rounding things to a hundred points, we're not convinced.
Near-term, it seems movements exceeding 7,152 should be worthwhile, allowing some recovery to an initial 7,172 points. If exceeded, secondary calculates at 7,194, effectively keeping the index paddling on the spot.
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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