After the dubious rise to 7405 we should get some bearishness kicking in | 7340 resistance | 7246 7200 support

FTSE 100 outlook prediction analysis for 20th November 2019

Wasn’t expecting it to push to 7400 yesterday, as expected the 7385 resistance area to hold a bit better. However, the rise was obviously overdone as the pullback was sharp and swift, dropping all the way to the 7311 support in fairly short order.

Engineering conglomorate Halma was the biggest riser on the FTSE 100, after the company – which makes products including hazard-detection equipment – beat expectations with a 12pc rise in profit. The group said the figures, for the six months to the end of September, reflected “good organic and acquired growth”, reflecting solid performances across its operating areas. Its shares closed up 160.5p, or 8.5pc, at £20.59.

The company stood out on a day of small gains for the blue-chip index, which ended up just 0.2pc having stood as much as 1.3pc up earlier in the day, at one point coursing for its best single-session performance since mid-October.

A shift in sentiment pulled the FTSE 100 back down during the late afternoon however, as investors nerves of the US/China trade war continued. The pound hit a six-month high of €1.173 against the euro yesterday on hopes of an orderly Brexit.

TV Debate

The Prime Minister was judged to have narrowly edged the debate in a snap poll by YouGov, in which 51 per cent of viewers thought he had performed better than Mr Corbyn. Jeremy Corbyn was mocked over his Brexit policy, while Johnson faced jeers over the issue of truthfulness.

Deal Closer?

The near-deal between the U.S. and China that fell apart six months ago is now being used as the benchmark to decide how much tariffs should be rolled back in the initial phase of a broader trade agreement, people familiar with the talks said. The two sides, who are locked in tough — perhaps final — negotiations on a phase-one pact, are discussing linking the size of tariff rollbacks to the preliminary terms set in that failed May deal, according to the people, two of whom said the White House is still debating the precise percentage internally. The Chinese have demanded that all tariffs imposed after May be removed immediately and then tariffs imposed before that be lifted gradually, according to one of the people.

Markets Steady

Equity markets across the Asia Pacific region looked set for a cautious start, with stock futures edging lower in Japan, Hong Kong and Australia. U.S. equity gauges were mixed as investors weighed disappointing reports from retailers with new developments in the American-China trade saga. Ten-year Treasury yields dipped below 1.8%, while oil tumbled. The dollar fluctuated against its major peers after President Donald Trump said he “protested” U.S. interest rates that he considers too high in a meeting with Federal Reserve Chairman Jerome Powell at the White House. The Fed said Powell’s remarks were “consistent” with his recent public comments.

FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

After that drop off 7405 it feels like we might have seen the worm turn and we get the long awaited leg lower to test the first daily support at the 7247 level, with 7200 below that where we have the bottom of the Raff channels. Below that a move down to 7100 is not out of the question before any December rally. Of course, all these moves are being driven by news and sentiment at the moment, which is probably why we overshoot a lot of the technical levels. I am still favouring a leg down on the FTSE 100 and a rise in gold back to 1500 though.

If the bulls were to push it higher and break that 30min coral line at 7338 (we also have the daily pivot here) then a rise back towards the 7401 level is likely, as we have the key fib here and sets up a double top with yesterday. That feels like it might be a big ask though as the ASX200 has dropped off again today and cable is defending the 12900 level (if that rises then the FTSE should in theory drop).

If the bears were to break below the 7247 level today then it definitely does start to look more bearish. The S&P is struggling to break the 3130 area and indeed the 2 hour chart now has resistance at the 3127 level – a rally too here looks a decent short as would still like to see the S&P test the daily 25ema, at 3065 now but slowly rising.

Recommended Broker

IC Markets – offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!

Membership and Live Trading

If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.

What you get

• Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
• Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
• Telegram live trading room and webinar group membership for discussion and realtime trade updates

Keep up to date with new content, free sign up below

[yikes-mailchimp form=”4″]