Technical analysis for FTSE 100 for 5th March 2024
British stocks started the week on a downbeat note, with a sell-off across all sectors except precious metal miners and defence on Monday ahead of the national budget later this week. The blue-chip FTSE 100 index slipped 0.6% and the mid-cap FTSE 250 fell 0.5%.
While signs of easing inflation have kept investor sentiment afloat, the focus is now on finance minister Jeremy Hunt's pre-election budget on Wednesday for clues on potential tax cuts and the state of the economy. Automobiles, personal goods and chemicals led sectoral declines, down between 1.6% and 2.7%.
The benchmark FTSE 100 has underperformed global equities recently due to lack of exposure to the technology sector, which has powered gains elsewhere fuelled by an artificial intelligence-led stocks rally.
Precious metal miners were the top gainers for the day with a 3.2% jump as gold prices hit a three-month peak, driven by increased bets for a June interest rate cut by the U.S. Federal Reserve.
Asia
Most Asian stocks slid on Tuesday, led by sharp declines in Hong Kong as the start of China's week-long annual session of parliament disappointed investors with its lack of big ticket stimulus plans to prop up the struggling economy.
Equity markets in the region were already on the back foot following a retreat from record highs on Wall Street on Monday, amid signs the U.S. Federal Reserve is in no hurry to cut interest rates. U.S. stock futures also pointed lower, as did European futures
FTSE 100 technical analysis for today, 5th March 2024
Bit of a strange Monday for the FTSE100 yesterday though we got a small reaction at the 7620 support level. However bear Tuesday is kicking in and the price is just trying to break below that to start with today and we may well be on for a test of the 7570 support area next.
Initially we could see a bounce to take the price up towards the daily pivot resistance at the 7650 level, and a test of the 30m 200ema at 7657. We also have the 2h coral (now red) here and the 2h Hull MA at 7650. As such there are quite a few key resistance levels in this price area hence thinking that any bounce may well stall here.
We also head towards the budget tomorrow and we may well see some further profit taking ahead of that.
Support below the 7620 is at the key fib at 7596 to start with though as mentioned I wouldn't be surprised if we test the 7575 area today. If we do so then I would like to see a bounce here as that would also be the first test of the 200ema on the daily for a while. The daily Raff 10 day channel is also heading down now.
Below 7575 then 7540 is next up though I don't think we will get that low today.
On news front we have USA ISM Series PMI at 15:00 with a forecasted slight decline to 53. We may see a bit of volatility around that time.
Speaking of the USA, having tested the 5150 level on the S&P500 yesterday the bears have put their foot down and are pulling the price back towards the 5100 support area. With S2 and the 2h coral both there then the bulls will be trying to defend that.
So, feels like a short the rally day, certainly for the FTSE100, and the bulls may well struggle to break above the 7650 level today.
Good luck.
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