FTSE for Friday: are we close to a logical top?
Up 20% in just 12 months, the UK blue-chip index is in record-breaking mode, but it can't last forever. Independent analyst Alistair Strang reveals his latest forecasts.
31st October 2025 07:46
by Alistair Strang from Trends and Targets
With the FTSE 100 now running at around 9,760 points, things are getting close to a “logical top”, a point at which we tend to expect some reversals. Not necessarily a bear market, more a case where an artificial excuse is discovered to introduce a sharp 15% drop in the index value.
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Other markets tend to deal with these critical levels in their own fashion, usually by – in the case of the Nasdaq or S&P – the index being gapped over the potentially dangerous area. But for the UK, we shall not be aghast if some reason is discovered to provoke a short-term market problem.
Our concern stems from the expectation of a coming interest rate reduction, throwing a reasonable reason for a further excuse for index gains. As a result, the situation now exists where movement above 9,780 should promote gains to an initial 9,821 points with our secondary, if bettered, calculating at 9,908 points.
In a sane world, we’d already be concerned at the proximity of these two bigger picture targets as they tend to suggest an area where some reversals can be anticipated. Additional, our “Big Picture” high potential now calculates at 10,162 points, an index level where some hesitation almost must occur. Whether reversal to around 8,300 points takes place should be questionable, though visually it even makes an awful lot of sense.
Near-term, below 9,689 looks capable of triggering reversals to an initial 9,644. Our longer-term secondary, if broken, works out at 9,596 points. Unfortunately, overall such a cycle suggests the chance of a future visit to a bottom of 9,475 points.
Tragically, such a reversal dance would be broadly in line with our expectations for the way the FTSE behaves, essentially working hard to pretend “everything is okay, just carry on” and keep the market on its trajectory. While visually this isn’t the worst idea, given the markets growth curve in 2025, our worry is a “business as usual” mindset shall not work for the longer term, with the proximity of a market “top” just above the magical 10,000 point level.
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.
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