FTSE for Friday: making sense of a crazy week
At the end of a week that was not for the fainthearted, independent analyst Alistair Strang consults his charts for clues as to future direction.
9th August 2024 07:43
by Alistair Strang from Trends and Targets
It has been a crazy week on the FTSE 100, with Monday's early plunge provoking some unpleasant behaviour. As we mentioned on Thursday, we are far from confident a “bottom is in”, a suspicion confirmed in the opening second of trade when the FTSE was manipulated downward by 60 points, then losing a further bunch of points in the next 30 minutes.
It certainly wasn’t behaviour pumping out confidence for the future, creating a puzzling situation.
- Invest with ii: Open a Stocks & Shares ISA | ISA Investment Ideas | Transfer a Stocks & Shares ISA
To be fairly brief, above 8,176 points should next promote FTSE 100 recovery to an initial 8,287 points, a movement which if triggered should be quite sharp, probably with an extremely tight stop loss level. Our longer-term secondary calculates at 8,421 points, an ambition which would exceed the immediate Blue downtrend but we’ve some doubts.
For various nerdy reasons, the FTSE needs to close a session above 8,250 points to allow us to tick a major box for movement of greater strength and, as it’s a biblically wet August (here in Argyll), we have doubts.
If, as we suspect, things intend to go wrong, the FTSE actually needs to fall by around 100 points to 8,033. Attaining such a level risks triggering further reversals to 7,937 points with our secondary, if broken, at 7,752 and a probable challenge against the immediate uptrend since 2020.
While we expected the FTSE 100 to settle within a trading channel for August, events of the first week are leaving us a little clueless.
Have a good weekend.
Source: Trends and Targets. Past performance is not a guide to future performance.
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.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.