FTSE 100

FTSE 100 and FTSE 250 Retreats – But Bullish Trend Remains

The FTSE 100 futures are down by 0.25%, making it the first decline in the past five days. The index is trading at £5,850, which is slightly below yesterday’s high of £5,945.

With other global futures falling, there is also a possibility that the FTSE 250 and FTSE all share indices will open lower today.

The main catalyst for the FTSE 100 is the ongoing counting of votes in key battleground states. Investors believe that the final tally will come today even as the president launches legal action in several states.

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The market is also reacting to the Federal Reserve interest rate decision. In a statement, the bank left interest rate unchanged and warned that the US economy was still not out of the woods yet. This decision came on the same day as the Bank of England boosted its asset purchases.

Today, the FTSE 100 and FTSE 250 will also react to housing data from the UK and US employment numbers. Halifax, which is owned by Lloyds Bank, will release the closely-watched house price index. Analysts expect the data to show that the index rose by 0.5% in October from 1.6% in the previous month.

Later today, the Bureau of Labour Statistics will release the official jobs numbers. Analysts expect that the unemployment rate fell to 7.7% as the economy added more than 600k jobs.

The top FTSE companies to watch today will be Beazley and Scottish Mortgage Investment Trust. The former will release its trading update while the latter will deliver its interim report.

The FTSE 250 and FTSE all share index ended the day at £17,928 and £3,325, respectively.

FTSE 100 technical chart

On the daily chart, we see that the FTSE 100 has pulled back, albeit slightly. This pullback is not by accident, since the index had just tested the upper side of the descending channel that is shown in green. It is also slightly above the 25-day and 15-day moving average.

Still, I expect that the index will resume the upward trend, move above the resistance, and possibly test the 50% Fibonacci retracement at £6218. The alternate scenario is where bears come in and attempt to test the lower side of the channel at £5600.

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FTSE index technical chart

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