FTSE 100: Footsie Has Bottomed and the Recovery is Underway
The FTSE 100 index is still in recovery mode as investors continue buying the dip. The index is trading at £7,270, which is significantly higher than this month’s low of £6,974. The price action mirrors that of other American and European indices like the Dow Jones, CAC 40, DAX index, and Stoxx 50.
UK equities rallied last week even after the relatively weak economic data from the UK. The numbers showed that the country’s inflation surged to the highest level in decades. In the same period, retail sales crashed hard as consumer spending waned. Another data by Gfk showed that the country’s consumer confidence crashed.
The FTSE 100 index rose on Monday as mining companies led. Antofagasta, Anglo American, and Fresnillo were among the top movers. Other companies that did well were Prudential and Standard Chartered. On the other hand, the worst performers in the index were Abrdn, Burberry, BT group, Ocado, and Sage Group.
The top stories in the UK were the investigation of Wise CEO. HRMC is being investigated for a list of business and individual tax avoidance. This investigation could see him ousted as the fintech CEO.
Meanwhile, the IAG share price retreated after staff at British Airways warned that they will strike soon citing bad working conditions. Last week, rail workers went on a three-day strike while postal workers are expected to strike soon. Royal Mail share price rose slightly after the company launched a healthcare division. The goal is to build upon the services that the company’s staff provided during the pandemic.
FTSE 100 forecast
The four-hour chart shows that the FTSE index has been in a strong bullish trend in the past few days. The upside started when the index made a double-bottom pattern at around £7,000. It managed to move above the key resistance level at £7,196, which was the upper part of the double-bottom pattern.
Also, the 25-day and 50-day moving averages have made a bullish crossover pattern. Therefore, the FTSE 100 index will likely continue rising with the next key resistance point being at £7,338. A drop below the support at £7,196 will invalidate the bullish view.