Bulls on the FTSE 100 index did not allow the soft retail sales data posted earlier in the day to stop their groove, as risky sentiment swept through the global markets on Tuesday.
Yesterday, Pfizer announced that the UK was on the verge of approving the coronavirus vaccine it developed with BioNTech for use in the UK. This announcement has provided hope that the UK could add a significant arsenal to its fight against the coronavirus much earlier than anticipated.
Earlier, CBI Realized Sales data fell to a 5-month low, as it registered a drop to -25 in November (versus a consensus of -35). It clocked at -23 a month earlier. Analysts attributed the decline to the effect of the lockdowns instituted three weeks ago. However, the fact that the figure fell by far less than the markets expected may have stemmed any bearish plays on the FTSE 100 and allowed risky sentiment to play to the advantage of bulls.
Today’s gainers on the FTSE 100 are unsurprisingly stocks positioned to benefit from risky assets. BP (crude oil), Rolls Royce (aviation), Antofagasta (copper miner), Royal Dutch Shell A and B (crude oil) and Glencore (copper miner) are among today’s top 6 gainers on the FTSE 100.
Ocado, Aveva, Fresnillo, Homeserve and Experian were among top losers on the day.
Technical Outlook for FTSE 100
Today’s upside move on the FTSE 100 has violated the upper edge of the bullish pennant, and also the 6405.3 resistance line. However, we need to see this move confirmed and translate into a break of the 6514.8 resistance for the price to take off in the upward direction. According to technical analysis, the measured move from the break of the bullish pennant on the FTSE 100 daily chart should at least target 6898.1. For this to happen, bulls need to take out 6599.2 and 6739.0, in that order. Further advance would target the 26 February 2020 high at 7068.9.
On the other hand, a failure of the current breakout move could precipitate a decline towards 6325.3, with the psychological support area at 6200.0 providing an additional target for bears. Attainment of this price level invalidates the pattern and provides potential for targeting of 6067.6 and 5951.6, in that order. Bearish sentiment on the FTSE 100 is required to make this happen. However, sentimental bias favours the upside so these downside targets may be potential dip-buying points for bulls.
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FTSE 100 Daily Chart
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