A recovery for FTSE 100 and TP ICAP?
Independent analyst Alistair Strang studies the possibility of recovery for the UK's leading index, and at this inter-dealer broker where an upturn is already two years old.
8th August 2024 07:36
by Alistair Strang from Trends and Targets
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We shall be covering the FTSE 100 tomorrow, but there are discussions among market analysts trying to decide if the reversals this week were a fluke which shall produce sharp recovery. Some of the usual suspects are predicting a ‘W’ shaped recovery, essentially a double bottom. Both sides of the academic argument are making the assumption the visit to 7,914 points on the FTSE was indeed a bottom. Of course, this provoked our usual blast of cynicism as there’s no such thing as a sure thing in the UK market!
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It’s all been a bit of a puzzle, the UK reversing to an arithmetically correct bottom, along with Germany, Wall Street and the S&P500. This sort of behaviour generally is taken to confirm markets placing themselves in a safe zone, complying with our utter distrust of market movements during August.
Our issue with the UK market comes from our arithmetic – do we trust Futures numbers or real FTSE opening hours numbers? It’s fairly unusual for this to be a Big Deal, but this week the only way we could conflate the FTSE 100 exact bottom was to rely on Futures out of hours, a method we distrust, but which this week may be right.
With major world markets opting to align themselves with a theoretical bottom in the last few days, perhaps it shall prove to be the case because it’s August, when everyone is on holiday.
We cannot produce any miracle numbers, other than make an assumption if “the bottom” was real, FTSE recovery to around 8,250 points should also be real.
As for TP ICAP GROUP (LSE:TCAP), we think they’re worth casting an eye over. The financial services firm, a member of the FTSE 250, enjoy a copper bottomed reputation. Perhaps it’ll be worth keeping an eye on their share price as something seems to be happening with this company, despite some recent collywobbles.
In a bit of a jump, we can produce 245p as a potential trigger level, allowing share price recovery to an initial 254p with our longer-term secondary working out at an eventual 306p and some hesitation. Our secondary even makes some sense from a visual perspective, doubtless able to provoke a stutter in a share price gain. Regardless, we shall revisit if the company share price closes above 254p as this risks becoming game changing.
Should things intend to go wrong, below 208p risks some trouble, potentially producing reversals to an initial 156p with secondary, if broken, at 134p. However, our thoughts are fairly positive for the future.
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.
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