The FTSE 100 has started the trading day on a muted note but looks set to end the week higher on the back of risk-on sentiment from coronavirus vaccine hopes and a gradual reopening of the UK economy. Supermarket, entertainment and healthcare stocks have been the backbone of this week’s performance.
This week’s gainers on the FTSE 100 include stocks such as Fresnillo, Flutter Entertainment, Ocado Group and AstraZeneca. Ocado’s CEO was quoted this week as saying that he expects online penetration of the UK grocery industry to double in a few years. Ocado, an online supermarket, has been a significant beneficiary of the surge in online grocery shopping during the UK lockdowns at the height of the domestic epidemic. The same period saw online grocery shopping penetration nearly double from 7% to 13%.
Flutter Entertainment has seen its stock surge recently, as sporting events resume in the UK. Flutter had earlier indicated that its revenues had proven to be more resilient than expected when sporting events went on a forced recess. Its revenues may, therefore, get a boost as sports resume.
The FTSE100 is trading flat at 6238.7.
Technical Outlook for FTSE100
The FTSE 100 is presently range-bound on the daily chart, with the index having seen a rejection yesterday at the top end of the range at 6339.1. The floor of the range is at 5986.8, formed by lows of 26 May, 12 June and 10 July. Further recovery of the index requires a breakout above 6339.1. Such a move would target the 6504.9 resistance level (8 June high), with 6643.1 (lows of 3/5 March) and 6836.5 (4 March top) constituting the next resistance targets.
On the flip side, a breakdown of the 5986.8 floor would be able to target the 5724.3 support level, with 5579.2 (4 May, 15 May lows) and 5392.7 being the logical downside targets after that.
If there is insufficient momentum to break the range, we could see price continue in the sideways trend for some days.
FTSE 100 Daily Chart