What FTSE 100 needs to make a 12-month high

Restricted to a tight trading range this month, how might investors trade the FTSE 100 index.

Rarely have we been so glad to welcome the weekend. This week really sucked on the FTSE 100, a hysteria of panic uncontrolled movements, strangely reminiscent of our elected MP's at Westminster.

There's little doubt the antics of politicians are again affecting the market, the FTSE proving more irrational than other markets and generally providing a confused week. Allegedly, the situation now is of movement above 7,395 apparently being capable of triggering growth to an initial 7,445 points. If exceeded, secondary calculates at 7,485 points.

We have doubts and would recommend a tight stop, if the scenario triggers. Unfortunately, the tightest available is quite wide presently at 7,333 points!

The reason for this is fairly simple. Below 7,351 risks triggering reversal to an initial 7,333 points. Below 7,333 and continued weakness to 7,280 calculates as possible, perhaps even 7,247 if negatives news manages to power a grotty Friday. 

Visually, a down day on the market will make some sense as, despite Thursday achieving a "higher high", the speed of reversal thereafter was noteworthy, and we've a suspicion the UK index intends to remain within its tight September trend, at least until the end of the month.

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.