Interactive Investor

FTSE 100: Short-term outlook is not great

25th January 2019 09:35

Alistair Strang from Trends and Targets

There is little reason not to anticipate further weakness for the blue-chip index, argues our chartist.

FTSE for FRIDAY 

Patisserie Valerie's demise came as a surprise, even to us. We're quite used to companies issuing unexpected news but equally aware their share price movements generally warn of such in the weeks/months before. 

With Patisserie Valerie (LSE:CAKE), there was absolutely nothing. In fact, the converse was true as a fairly strong argument existed for a price rise.

We can only speculate on the causes of its death, given the news rather a lot of shares were sold prior to CAKE being crushed. Investors can be confident the regulators will doubtless fully investigate and, as usual, do nothing!

As for the UK market for Friday, it's complicated…

The FTSE 100 index closed Thursday at 6,818 points, threatening weakness continuing below 6,800 shall bring reversal to 6,659 points next! Our secondary, if 6,659 breaks, is at 6,590 points. The tightest stop position is quite wide, presenting itself at 6,909 points.

The pace of decline during the last few sessions has been fairly relentless, if gentle. Unfortunately, given the point the market closed on Thursday, there is little reason not to anticipate some further weakness.

Only if now above 6,909 dare we take any recovery seriously as this permits an initial 6,943 with secondary, if bettered, calculating at a visually unlikely 6,991 points.

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. 

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. 

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