Interactive Investor

How FTSE 100 can rise another 300 points, plus an update on Barclays

6th February 2023 07:42

Alistair Strang from Trends and Targets

After the FTSE 100 achieved a record high on Friday, independent analyst Alistair Strang's charts show potential to extend the rally. He also shares his bullish forecasts for Barclays.

We always make a big deal about “higher highs”, but the FTSE 100 is posing an interesting question, one where our inclination is to retreat to our usual demand to see prices close higher than previous levels.

Once upon a time on 22 May 2018, the FTSE had a day high of 7,903.5 points. Last Friday, 3 February, the FTSE had a day high of 7,906.58.

These numbers are obviously essentially identical but there’s a more important aspect, if we view the closing numbers for each session. In May 2018, the index achieved a closing price of 7,877 points whereas last Friday, the index closed the session at 7,901.8 points, a more substantial “higher high”, one giving considerable hope for the future.

We do prefer seeing a share price actually close a session above a previous high as this invariably proves the safer signal for the longer term but, on this occasion, it spiked higher during the day but managed to close lower than its historical high.

Perhaps there’s no concise “no-brainer” argument for further immediate gains, but should the FTSE wander above 7,913 anytime soon, it’s going to be hard to avoid a further gain of 300 points.

Source: Trends and Targets. Past performance is not a guide to future performance.

Barclays

We’d anointed 181.15p as a level above which Barclays (LSE:BARC) shares needed to close to provide an early sign of springtime. Finally, in the middle of January, the required miracle occurred and what’s been happening since is a little bit underwhelming, the target numbers only requiring the slightest of tweaks.

It certainly appears the share price now needs to close below 180p to indicate coming trouble, but by most standards, we’re remain pretty optimistic.

Now above 189p calculates with the potential of a visit to an initial 196p next with our secondary, if exceeded, working out at a more useful 218p. Those folk with a memory greater than a goldfish will notice these are almost identical target levels to those provided three weeks ago, the share price failing to advance in leaps and bounds.

Our alternate, below 180p now points at an initial 175p with secondary, if broken, at 169p and hopefully a bounce. We’d regard this as little more than an attempt to slow down the pace of any Barclays rise.

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. 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.