FTSE for Friday: an optimistic outlook for the blue-chip index?
Independent analyst Alistair Strang shares his view of what could happen next.
30th August 2024 08:55
by Alistair Strang from Trends and Targets
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The problem comes from the blue line on the chart. It looks like a fairly valid downtrend since May this year and when we ran the numbers against it, the FTSE 100 had to close the session on Thursday above 8,379.523 to prove the index is heading up.
On Thursday, the FTSE closed at 8,379.64 points, above the blue trend line by just 0.117 of a point. Are we supposed to be wriggling with optimism for Friday?
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Our inclination is to play safe, suggesting a scenario where above 8,401 points has an initial target of 8,457 points, a level where some hesitation looks possible. Should such a level be exceeded, we can calculate a future 8,638 points as a valid target. For this, we expect it will be dependent on interest rate cuts during September.
Source: Trends and Targets. Past performance is not a guide to future performance.
However, our alternate scenario for slight reversals feels more possible as weakness below 8,336 produces an immediate target at 8,322 points with our secondary, if broken, at 8,290 points.
Such movement would effectively park the index around the level it opened August, creating a situation where “nothing happened” becomes a viable excuse when the grown-ups return from holiday to manage the markets!
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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