25th April 2019
London’s commodity stocks dragged the FTSE 100 off a near seven-month high yesterday.
The index closed 0.7pc down, led lower by mining stocks and oil giants BP and Shell. The FTSE 100’s heavyweight commodity stocks have been knocked by the rally in oil prices cooling and speculation that China will hold off from pumping more stimulus into its economy as growth starts to rebound.
The deficit almost halved in 2018-19 to drop to its lowest level in 17 years, giving Chancellor Philip Hammond the scope to boost spending once Brexit uncertainty clears. Government borrowing declined by £17.2bn to £24.7bn after a bumper tax haul last year. The deficit has now fallen for the last seven consecutive years and is well below the the peak of £153bn in 2009-10 during the financial crisis.
Facebook reported glowing results, as first-quarter revenue rose a better-than-projected 26 percent on the strength of its advertising business. Microsoft topped estimates too, raking in $30.6 billion in revenue thanks to a flurry of cloud-computing deals. The results were less rosy at Tesla. While the carmaker reaffirmed its delivery guidance for the year, it lost $2.90 a share for the period, missing estimates for a loss of $1.30.
Oil futures ended a two-day rally that had pushed prices to their highest since October due to a surprisingly big jump in U.S. crude inventories. The build was tempered somewhat by the 10th consecutive drawdown for gasoline supplies and a ramp-up in refinery activity.
FTSE 100 Trading Signals, Forecast and Prediction
With the bulls failure to push on past the 7515 resistance area for this week with any conviction yesterday, the 2 hour chart has gone bearish and has resistance at the 7500 level. Coupled with significant daily resistance at the 7530 and 7550 levels, as well as the daily RSI dropping back down through 70, we may well start to see a bit of a pull back, albeit a modest one. The S&P resistance at 2935 remains valid, and the failure of the bulls also to reach 2945 yesterday suggests that we may also see a dip back down towards the 2900 level. Though 80 percent of S&P 500 companies reporting results so far have exceeded estimates, some are starting to question whether the rally has legs.
On the FTSE, if the bulls were to push past the 7550 level then there is the top of the 10 day Raff channel at 7580 to contend with, though some slightly lower daily resistance at 7561.
To start with today the 30min chart is just turning to bull, after the overnight action has remained at around the 7470 level. The bears brought it down to 7453 yesterday evening, just shy of the 7444 daily support, and we have seen a small bounce back up from that low.
The ASX200 (Australia) had a weakly bullish day on the futures, though it was closed for Anzac Day, while the rest of Asia was mixed, on continued signs of weakening economies.
For today I am thinking that we get a rise to test the 7500 resistance level then a bit of a dip off that. I am watching that level closely, but if it breaks then those higher resistance levels will be in play, and it might well be worth flipping to a long to target 7530+. I am also watching the 7444 level for support, and we also have S1 here at 7442. Below this then the 7417 level is key – the bulls will really need to defend that level to keep the bull run we are currently in going, as a break of that will likely lead to 7350.
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