FTSE 100 for Friday (FTSE:UKX)
Having lived through the Scottish independence thing, we’ve a horrid fascination watching events in Spain unfold and suspect the worst is coming. Of course, we’ve kept a close eye on the IBEX and it starts to appear the Spanish index also fears trouble ahead.
Currently trading around 10,172, should the index kick itself below 10,100, it ticks the first box for quite severe reversals initially to around 9,950 points. At this point, it’s in serious trouble as our secondary is now around 9,250 points.
If triggered, the stop can be very tight as we’d tend to anticipate a fake drop to be followed by a spike to around 10,300 points. Then it’s very possible the real drop will commence.
Our reasoning behind such a convoluted scenario is simple. The market is perfectly aware quite a few folk will be watching and we all know how amusing it is when a buy order is triggered then the stop loss hit just a few minutes later, neatly killing a trade!
As for the FTSE 100 (UKX), this week has proven rubbish with minimal movements.
We’re inclined to slight optimism for Friday as the market feels like it only requires better than 7,538 points to provoke a useless 7,548 points with secondary, if (when) bettered at 7,570 points.
If triggered, the stop can be placed at around 7,504 points to reflect the immediate uptrend.
So, what happens if 7,504 breaks? A visit initially toward 7,486 makes sense. Secondary comes in at 7,466 points. Stop comes in at a quite reasonable 7,526 points.
Have a good weekend.
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.
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