Despite yesterday’s bump to the south, the FTSE 100 is on course for its best weekly performance since April. Today’s price action has been dominated by indecision between buyers and sellers. Buying optimism from a possible coronavirus vaccine is being countered by the rise in coronavirus cases in the UK and across Europe. As an analyst with a UK-baed brokerage put it, it would appear that today’s price action is a battle between optimism and present realities.
On the index, there are mixed results. Sharp gains for coronavirus-battered travel shares are being offset by selloffs in medical brands such as Smith and Nephew, as well as weaker oil stocks and a stronger Pound. The FTSE 100 is up by 1.22% at the time of writing.
Technical Outlook for FTSE 100
Yesterday’s penetration close below the 6325.3 resistance negated the confirmation of the upside violation of Wednesday. However, the price made an attempt to break this level but was beaten back again this Friday. Presently, the daily candle signals an indecision pattern which could still change before the trading week comes to an end.
Buyers will be looking for a double successive candle close above 6325.3 to confirm the breakout and establish Wednesday’s high as the initial target. Above this level, 6514.8 forms a new target for buyers in the near term.
On the flip side, a breakdown of 6325.6 as a result of a second successive close below that level could allow the FTSE 100 to make a run for the 6200.00 psychological support. Major support lies at the junction of the 50% Fibonacci retracement level from the 30 October swing low to the 10 November swing high, and the channel’s upper edge at 5951.6. If the FTSE 100 sellers set their focus on this area, they would need to take out 6200 and 6067.6 along the way.
Don’t miss a beat! Follow us on Telegram and Twitter.
FTSE 100 Daily Chart
More content
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Eno on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.