FTSE for Friday: hopefully a day of gains
12th May 2023 07:34
by Alistair Strang from Trends and Targets
Independent analyst Alistair Strang has identified a significant level for the FTSE 100 which could give hope for Friday's trading session.
We gave a pretty accurate throwaway comment on Wednesday, telling clients the FTSE 100 was probably heading down, but we suspected a bounce around 7,680 points.
Seeing the market hit 7,680 points at 3.12pm provided the perfect time to leave the screens and go make an unfashionable Latte, breaking a personal rule (inspired by Italy) to never make one after 10am. After all, it’s really a breakfast beverage rather than an all day event, despite deep seated greed.
When returning with the Latte, the FTSE had bounced from our target and was teasing, spending the minutes trying to better the high of 7,696 points which has been achieved before hitting out bottom level. There was every chance, should the FTSE exceed this level, it risked triggering further positive movements as it would now be creating an official “higher high”.
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This sort of thing isn’t only a Big Picture phenomena, but instead is something worth applying to most scenario as the results generally will not disappoint. Unless, of course, the market starts throwing price movements gaps into the equation, making it dangerous to rely upon visuals.
As it looks like our 7,680 shall prove an important moment in time, any moves now below such a level risks promoting reversal down to an initial 7,643 and hopefully a proper bounce.
Visually, this certainly appears likely due to the presence of the Blue downtrend since 2018. In the event 7,643 breaks, our secondary calculates at 7,578 points and a dodgy return under the long-term downtrend, dumping the index in a zone where an eventual 7,371 works out as a bottom.
However, the 50-point bounce from 7,680 is giving some hope for Friday, and now above 7,740 looks capable of triggering movement to an initial 7,771 points with secondary, if exceeded, at 7,822 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.
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