Interactive Investor

Trading the FTSE 100 as if it was a share

The index's lack of logic continues to confuse, so our chartist looks at it from an equity perspective.

1st March 2019 09:02

Alistair Strang from Trends and Targets

The index's lack of logic continues to confuse so our chartist looks at it from an equity perspective.

FTSE for Friday (FTSE:UKX)  

The wonderful lack of logic which is the UK stock market continues to confuse, with Guernsey overtaking Reunion Island in checking our Friday projections. We rather like taking an "if it were a share" stance, when backed into the current corner as often this will prove the correct approach and get to the bottom of the problem.

Here goes then;

"If it were a share", we'd feel comfortable it's heading to 7,400 next, perhaps even 7,750 points! Quite a simple statement, one which cuts to the heart of the matter. Unfortunately, there's an important thing we've failed to mention.

"If it were a share, it'll probably go down a bit before it goes up".

The immediate situation points at traffic now below 7,040 allowing the UK to weaken to 6,967 points. In itself, this is a fairly reasonable drop and one which matches the uptrend (red) since the start of this year.

As a result, if 6,967 makes a guest appearance anytime soon, the visuals indicate the market should rebound from such a level. Greater concern is our secondary calculation, should 6,967 break as a future slump to 6,870 looks extremely viable.

Near-term, we'd pay attention should the FTSE weaken below 7,040 as travel down to 6,967 risks being rather swift. If triggered, the tightest stop position looks like 7,120 points.

What happens if 7,120 exceeded? Initially we're looking for traffic upward to an initial 7,180 points. And if exceeded, a further 115 points appears to be on offer, taking the index to 7,295 points and beyond.

For now, we suspect the FTSE shall exhibit some continued reversal down to the 6,967 level.

Have a good weekend.

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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