FTSE100 Makes Strong Start to the Week Ahead of UK Elections
The FTSE100 index has made a strong start to the week ahead of the UK general elections scheduled to hold on Thursday December 12. The FTSE100 has benefited from strong performances of shares of Tesco and Anglo-American. Shares of Tesco are up by more than 4% after it announced that it was selling its Asian businesses said to be valued at more than 7 billion pounds. This move topped that of Anglo-American, which is a distant second in the list of risers on the FTSE100 for the day.
FTSE100 Getting Some Pre-Election Lift from Polls
Today’s performance is a welcome break from the poor performance of last week which had driven the FTSE100 out of the long-term ascending channel, threatening a full-scale price breakdown.
The markets are also getting some lift from the latest polls which have re-emphasized the lead of the Conservative Party over the Labour Party, Liberal Democrats, Brexit Party and others. If the Conservatives win as is widely expected, this should provide them with the majority needed to deliver an orderly Brexit; a market-friendly development.
There is a long-term ascending channel present on the weekly and daily charts, which also features some horizontal price levels that have largely been respected by price action over the last 8 weeks. Last week’s bearish movement which was triggered by President Donald Trump’s comments about preferring a post-election US-China trade agreement drove prices below the ascending channel in a violation touch-off. However, this violation did not sail through as the price support at 7127.2 wore off any further downside momentum.
The price bounce of today has returned the price action to the August 6 and Oct 13/14 highs, located at 7246.4. A break above this level will take the FTSE100 squarely back into the channel, and will also target the next price resistance at 7420.2, where previous highs were found on June 11, September 29 and November 26.
On the flip side, a break below 7127.2 targets 7006.3, which is a previous low seen on August 26 and October 3.More content