FTSE for Friday: studying the odds of a Christmas rally
Following a decent couple of weeks for the blue-chip index, independent analyst Alistair Strang has produced a new chart which looks at the possibility of reaching a new high by Christmas.
6th December 2024 07:21
by Alistair Strang from Trends and Targets
Sometimes appearances can be deceiving. If trend lines are stripped away from the FTSE 100 chart, there is certainly some visual hope the index intends to head upward. It is the Christmas season after all, we deserve it.
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However, when we review what actually happened on Tuesday of this week between 1pm and 2.30pm, there was a bit of an “oops” moment, with the FTSE 100 exceeding the Blue downtrend. While the index value ended below the Blue downtrend by the end of the session, what happened intraday felt similar to what happens when a puppy suddenly lunges in an unexpected direction, pulled back with a degree of panic.
This has created a situation where weakness anytime soon below 8,320 points risks promoting reversal to an initial 8,290 points with our secondary, if broken, a more interesting 8,220 points. If triggered, the tightest stop looks like an attractive 8,345 points, a pretty interesting risk/reward scenario.
Maybe the upward break was simply an early move, but one which should be hoped for. Today, for instance, has the US Jobs report which is something that “sometimes” kicks the markets into life.
Above 8,353 points now allows for index movement to an initial trend challenging 8,375 points with our secondary if closure above such a point, working out at a longer term 8,427 points. This would be game changing, kicking down an icy door and allowing Santa to visit.
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.
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