FTSE for Friday: indications of further improvement
27th May 2022 07:45
by Alistair Strang from Trends and Targets
Analyst Alistair Strang believes there are indications of a coming improvement for the FTSE 100, which is not far off multi-year highs and an all-time high at just above 7,900.
Thursday was a truly confused FTSE day until the USA opened for business, then everything seemed to change for the better. There are certainly a plethora of indications which hint this month may finish in quite an encouraging position, just what the nation needs as everyone comes together to congratulate the Queen next week.
Certainly, as we head into June, a surfeit of bank holidays will doubtless produce a confusing end to May. Firstly, the US is closed on Monday to celebrate Memorial Day. Then, we can enjoy a couple of days of normality through Tuesday and Wednesday before the UK experiences Thursday and Friday to celebrate Her Majesty's 70 years on the throne.
As mentioned, there are indications of a coming improvement for the FTSE 100. Near term, above just 7,576 points should prove capable of triggering a surprise movement to an initial 7,625 points. If exceeded, our secondary calculates at an extremely possible 7,670 points. If triggered, the very tightest stop appears to be at 7,512 points, the low of Thursday.
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An important detail about our secondary target level comes from the proximity of the Blue downtrend. Given the markets slavish adherence to this line in recent months, there appears a firm suggestion of hesitation, should such a target level appear. This particular trend line dates back to 2019 and we suspect the FTSE shall be required to close above it, just to confirm happy days are ahead.
Source: Trends and Targets. Past performance is not a guide to future performance
Our alternate scenario, if things intend to go wrong, triggers should the market wander below 7,453 points.
Movement such as this looks capable of promoting reversal to an initial 7,423 points with secondary, if broken, at 7,380 points. Neither target is particularly dangerous looking, perhaps presenting a “safe” level where the FTSE could park while we all enjoy dancing in the streets, waving our little flags, with the National Anthem on repeat, blaring from our phones.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
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