18th December 2017
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The final full trading week of 2017 is here (though we do end at lunchtime on Friday), and I expect the rally that started on Friday with the 7430 support level holding to continue for a bit longer, to test the 7540 level. This level looks pretty key for the week ahead, and the bulls will be keen to push above this. A break of this also sets up a decent 2018 for the FTSE 100. After the rise on Friday, the 2 hour chart is bullish, showing support at 7496, pretty much where we have retraced back too after Sunday night’s futures high of 7520.
U.S. stocks also rallied to new highs on Friday and the dollar strengthened as the tax bill made progress in Congress. The S&P 500, Dow Jones and Nasdaq 100 closed at records. Asian investor focus turns to the Bank of Japan, which meets to set policy this week amid lingering suspicions among some market players that Governor Haruhiko Kuroda may fine tune stimulus next year.
FTSE Outlook and Prediction
As mentioned I am expecting the bulls to build on Fridays rise and am thinking that we will get a rise towards the fib level at 7542. This level is liable to see some bears appear as it looks fairly key (it was also the top of the Raff channel on Friday). We are into Santa Rally territory properly now, so be careful with shorts but still worth a go off the resistance levels.
There is still a lot of focus on the tax cuts in the US, and as such success or failure of that will move the US markets, and in turn, the FTSE 100. We also have Brexit and cable driving the FTSE 100 still.
The daily chart is still bullish, with support at the 7428 level so any dip down will likely see this area defended by the bulls. Its also around Fridays low.
For today though I have a fairly simple plan which is a rise up towards the 7542 and see what happens there. We may dip down to Fridays high around the 7490 level first. Above 7542 we have the top of the 20 day Raff at 7571 and a daily close above this will likely see a rise back towards 7600. I am still expecting the year to end fairly positively. Its actually been fairly low key for the FTSE this year with just a 500 point range.
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