Technical analysis for FTSE 100 for 20th February 2024
British equities kicked off the week on an upbeat note, boosted by gains in pharma and biotech shares following the U.S. FDA's approval of AstraZeneca's lung cancer drug, while Currys soared on takeover interest.
The blue-chip FTSE 100 index climbed 0.2% to a near seven-week high, while the mid-cap FTSE 250 index edged 0.1% higher.
Trading volumes were low globally as U.S. markets were shut for a public holiday.
Both of the UK's main stock indexes snapped a two-week losing streak last week amid investors optimism about an early interest rate cut from the Bank of England after domestic economic data signalled slowing inflation.
Among sectors, industrial metal miners were the top losers, falling 1.3% as copperprices slipped after China's central bank held key rates on medium-term loans steady.
Meanwhile, the price of homes being put up for sale in Britain has risen in annual terms for the first time in six months, according to an industry survey.
Chinese equities slipped as a reduction in the nation’s mortgage reference ratefailed to dispel the gloom surrounding the world’s no. 2 economy. The dollar tracked a rise in US yields. Stocks on the mainland and in Hong Kong slipped Tuesday, while those in Japan reversed early gains. Benchmarks in Australia and South Korea also retreated. European futures were lower and contracts for the Nasdaq 100 fell after US markets were shut Monday for a holiday.
Asian shares were pinned below 1-1/2 month highs on Tuesday as even a larger-than-expected interest rate cut in China failed to excite investors jaded at the lack of bigger stimulus measures.
Economic indicators, on which this week is a little bit light, are likely to drive the next move.
Ahead there will be a wary eye on Nvidia's earnings report on Wednesday as investors discover whether it can beat already lofty expectations.
FTSE 100 technical analysis for today, 20th February 2024
Lacklustre yesterday as expected with the slow grind up towards the 7740 resistance level which got a reaction. Unfortunately not till well after the bell! the US is back today so we may well see a rise and dip play out again, as they missed their Bull Monday. The various 2h charts for the US markets are looking more bearish with resistance levels kicking in, and looking at the 5015 level for the S&P500 for today. A such a climb to here then a drop back would fit the charts well.
That may well correspond to a similar movement on the FTSE100, with a rise towards the 7750 level and then a drop back.
That's is just above the new daily resistance level at 7742, and R1 is 7749 as well. A short in this area is therefore probably worth a go.
Above 7750 then the bulls will be aiming for the 7800 level where we have the top off the 10d Raff channel, and also R3 at 7802. Below that is 7772 R2, though if they break 7750 then may well want to go for the round number.
Support wise, then 7719 is the daily pivot and also the previous daily resistance now becoming support. Below this then 7695 being S1 may well get seen today and would likely be defended, initially anyway.
Lower down then the 7663 is the next key level with the key fib, S2 and the 30m 200ema all around here so should that level be seen. A long here is also worth a go. Not sure that it will get that low today but you never know.
We can often get a rise on the day after the US has been closed - share tips and buying kicking in - and that may follow though into that rise and dip.
The FTSE100 daily chart remains bullish with the 7625 locked in as EMA support now, and both the Raff channels heading up. The UK news of note today is BoE Governor Bailey giving a speech at 10:15. I expect a reiteration of previous rhetoric regarding rates, i.e. no immediate change.
Good luck today.
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