FTSE for Friday: bad end to the week for blue chips
30th July 2021 08:07
by Alistair Strang from Trends and Targets
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The UK is taking its lead from an after-hours wobble on Wall Street. Analyst Alistair Strang examines the implications for our own FTSE 100.
The FTSE 100 has spent this week threatening the worst but, finally, on Thursday, it started to make some sense as the market exceeded the weeks high of 7,038 points and, more importantly, closed the session above 7,027 points, exceeding the point of trend break for uptrend number 7, giving hope for the future.
From our usual perspective, this is liable to be quite a big deal, were it not for moves internationally against the index’ during Thursday evening. Some fairly sharp reversals have taken place but, curiously, Wall Street has failed to follow the Nasdaq and S&P 500 over a cliff.
Source: Trends and Targets. Past performance is not a guide to future performance
We wonder if the reversals were just nerves from traders, worried at the markets starting to overheat. If this is the case, time will tell. The FTSE needs below 6,900 points before hysteria is justified, the market once again risking reversal to 6,500 in such a scenario.
Instead, it appears above 7,098 points should make a fairly modest attempt at 7,114 points near term. If exceeded, our secondary works out at a longer term 7,193 points and this is liable to prove a big deal for the longer term. Unfortunately, if this triggers, the stop needs to be wide around 7,008 points, thanks to the markets showing aggressive movements in attempts to slow down gains.
The alternate scenario, if the FTSE wanders below 7,009 points, calculates with a drop potential toward an initial 6,973 points. If broken, our secondary works out at 6,905 points, dangerously close to causing real trouble for the market.
Finally, we referred to 7,193 above as a Big Deal for the longer term. Achieving such a level, while making it almost certain London intends challenge the pre-Covid level of 7,550 points, also places the FTSE in a position where 8,088 shall be viewed as the ruling big picture influence.
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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