FTSE 100 heading to 6,800?

FTSE FOR FRIDAY (FTSE:UKX)

The market has experienced a week reminiscent of the weather here in Scotland. In a word, miserable! While the index itself ‘only’ managed break our immediate drop target by 3 points, we have concerns should the market now manage below 7,153 points.

Achieving such a “lower low” will tend to indicate the FTSE 100  (UKX)- the index not after-hours futures – intends weaken further, potentially toward an initial 7,050 points with secondary, if broken, at a pretty miserable sounding 6,970 points.

We’re inclined to place a trigger level for such calamity at 7,120 points which rather neatly matches FTSE futures at time of writing.

Balancing this unfavourable outlook is the important detail we are about to experience the first Friday of the month, along with US Payrolls. US States have had exactly a day to cobble together some estimates which, invariably optimistic, could well throw a spanner in whatever misery the FTSE has in store.

However, the UK index needs better than 7,300 just to break the immediate downtrend and remove itself from a zone with some pretty vile drop potentials.

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

To give a sign the market intends an escape from all this weakening, the FTSE requires better than 7,194 as this looks capable of provoking an initial 7,220 points. Secondary, if bettered, calculates at a less likely 7,280 points.

This, unfortunately, does not remove the index from the overall misery zone which has 6,800 presenting an eventual attraction. We should also mention, the Brexit vote uptrend (red on the line chart) currently is lurking at 7,149 points!

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, Shareprice, 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, and 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.

Source.