FTSE for Friday: does FTSE 100 face 6% drop?
Looking very much like a poor relation in terms of stock market performance, independent analyst Alistair Strang has a closer look at potential for UK stocks.
15th November 2024 07:18
We’d gullibly thought the US election would provide an end to the daily amusement from across the water but it’s proving a gift which keeps giving. We suspect the lessons from this should be closely followed by the UK, with many media organisations rethinking their behaviour and stance, when they see how influential they were not.
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One puzzle is swimming against the tide of expectations as crude oil prices still have not reversed. With the incoming president promising a 50% reduction in energy costs, based on his intention to “drill drill drill” to return the country to self sufficiency in oil and gas, we’ve been expecting the price to exhibit some panic but, so far, Brent Crude has remained stable. Unless Brent crude somehow exceeds $81.50 anytime soon, it remains at risk of sharp and sudden reversals to an eventual $58, or so.
The FTSE 100 has been enjoying a vaguely similar period of illogical strength to that being experienced by Brent, as our calculations point to reversal to the 7,604 point level, almost 6% below last night's close at 8,071. Rather spoiling the scenario is the obvious fact the FTSE is currently pretending the 8,000 point level is inviolate. We have doubts, expecting the markets only need the right excuse to provoke trouble.
Currently trading around 8,071 points, the FTSE 100 needs below 8,030 points to give the earliest sign for trouble. Such a movement (though not with a spike down at the market open) risks pushing reversal down to an initial 7,939 points with our secondary, if broken, at 7874 points. Such a drop level becomes extremely dangerous, making an eventual 7,803 a possibility on this cycle. If triggered, the tightest stop loss level looks like 8,067 points which seems extremely sane.
Should things intend to go right for the UK market, above 8,097 points should trigger movement to an initial 8,133 points. Should such a level be exceeded, our secondary is quite surprising at an impressive 8,257 points.
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.
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