Technical analysis for FTSE 100 for 26th April 2024
Britain's benchmark FTSE 100 stock index scored its third consecutive record high on Thursday, led by miner Anglo American on a buyout offer from BHP Group, while investors cheered earnings from several blue-chip firms including Unilever, AstraZeneca and Barclays.
The blue-chip FTSE 100 ended the session up 0.5%, after hitting a fresh all-time high of 8,105.59 points earlier in the day.
Anglo American surged 16.1% to an more than 10-month high after BHP made an offer to buy the London-listed miner, valuing its share capital at $38.8 billion.
The deal would create the world's biggest copper miner with around 10% of global output. BHP's London-listed stock, however, fell 2.2%.
Meanwhile, data showed British retailers suffered their worst April for sales since 2020, when the country was in its first COVID-19 lockdown.
US inflation
US stock markets plunged amid fears of stagflation in the American economy, which grew at its slowest pace in nearly two years just as inflation jumped. Shares on Wall Street plummeted as official figures showed US GDP grew less than expected in the first three months of the year.
The growth of 1.6pc was behind forecasts for 2.5pc and came as separate data indicated that inflation picked up at a faster pace than predicted. The core PCE prices index, which is closely watched by the Federal Reserve, rose to 3.7pc during the first quarter, ahead of analyst expectations of 3.4pc
As a result, traders pushed back their expectations for the first interest rate cut by the US Federal Reserve, which is now priced in to happen by December rather than November.
Tech earnings
The stakes were high for the two biggest AI players — Microsoft and Alphabet — a day after Meta Platforms spooked investors with its forecast. They did not disappoint. Microsoft’s quarterly sales and profit climbed more than projected, lifted by corporate demand for the software maker’s cloud and artificial intelligence offerings. First-quarter revenue from Google’s parent company Alphabet exceeded analysts’ expectations as well, buoyed by growth in its cloud computing unit. A $250 billion exchange-traded fund tracking the Nasdaq 100 climbed more than 1% after the close of regular trading in a sigh of relief to investors worried about lofty valuations of the stock market’s most-influential group. Snap, meanwhile, saw its share price soar after posting stronger-than-anticipated revenue projections, but the picture for Intel was more downbeat. Shares in the biggest maker of personal computer processors tumbled after it gave a lackluster forecast.
Asia
The yen fell amid volatile trade on Friday after the Bank of Japan (BOJ) maintained its accommodative monetary policy stance at the conclusion of its two-day policy meeting, while Asian shares rose in the broader market.
The BOJ kept interest rates around zero on Friday, as expected, while removing a reference to the amount of government bonds it has roughly committed to buying each month.
The central bank also issued fresh estimates projecting inflation to stay near its 2% target in the next three years, signalling its readiness to raise borrowing costs this year.
Elsewhere, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8%. Hong Kong's Hang Seng Index surged 2%, while Chinese blue chips edged 1% higher.
U.S. stock futures jumped after tech giants Alphabet and Microsoft reported quarterly results that beat Wall Street estimates.
Nasdaq futures advanced more than 1%, while S&P 500 futures rose 0.85%. In commodities, Brent edged 0.39% higher to $89.36 a barrel, while U.S. crude gained 0.34% to $83.85 per barrel. Gold rose 0.18% to $2,336.05 an ounce.
FTSE 100 technical analysis for today, 26th April 2024
A decent climb back from the 8040 support level yesterday after the drop off the 8100 area, and we are back with 8200 on the radar. The bulls will certainly be keen, one again, to keep the momentum going ahead of the weekend. Good news on the tech front from MS and Alphabet certainly helped turn around the S&P500 yesterday.
Initially today we have decent support at the 8095 area with the daily pivot and the green 30m coral here. That would be the second test of that since it went bullish (green) at 8040 yesterday. The 2h chart is also now positive again and has Hull MA support at the 8126 level for today. Its been tested this morning and has held.
I feel like we may well get a slow rise today towards the 8170 area or possibly a bit higher. Optimistically the top of the 20d Raff channel is at 8221 and just above R2 for today. If the bulls did manage to get 8200 then it will certainly generate some positive news. The FTSE100 has actually entered into a period when it looks quite optimistic currently, though how long that remains will be interesting to see. 9000 this year!?
Should the bears break 8090 then a drop down the 8045 area loos pretty likely and should it do so then I would like to see a bounce here. S1, key fib and the 30m 200ema are all here so it should be likely to hold. Lower down than the 8000 round number once again and S2 at 7970. I don't expect it to get that low today though 8050 is 50/50 for a test.
On the news front, at 1330 there is USA PCE price data out which may well lead to some volatility, followed by the Michigan Sentiment at 1500. A slight drop is forecast which could lead to some profit taking ahead of the weekend.
Resistance wise, 8155 is the overnight high and also the key fib for today, which may cap early proceedings. Above that then 8170 for R1 with the aforementioned 8215 above that.
If the S&P500 can break its 25ema at 5103 on the daily chart then that could pull things up, and we have 5066 and 5052 as decent support on that to start with today. A break above 5103 would likely see 5132 and possibly 5173 for R2 and the top of the 10d Raff channel.
Nasdaq daily resistance is also at the 17755 level for the 25ema, with R1 and both the Raff channel tops at the 17840 area. The USA bulls may need some news to help push them on a bit once again.
Good luck today.
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