Technical analysis for FTSE 100 for 19th October 2023
The FTSE 100 closed down 1.14pc at 7,588.00, while the FTSE 250 midcap index ended 1.62pc lower at 17,403.46. It comes after house builders have suffered their worst day on the UK’s main stock markets in five months amid higher inflation and mortgage costs. Construction and building materials stocks sank by 1.91pc. Britain’s largest developer, Barratt Developments, shed 5.33pc after warning of an “uncertain” outlook.
Asian shares slid on Thursday as risk aversion prevailed in the market due to mounting worries over Middle East tensions, while gold prices stayed near two-month peaks with investors seeking safer assets.
U.S. President Joe Biden pledged to help Israel and the Palestinians during a lightning visit on Wednesday, but a deadly hospital blast that he ascribed to an errant rocket fired by Gaza militants derailed talks to prevent the war spreading.
U.S. stocks ended sharply lower on Wednesday as elevated Treasury yields weighed, with investors assessing the latest batch of quarterly corporate results and forecasts.
FTSE 100 technical analysis for today, 19th October 2023
It’s like the perfect storm of pessimism on the news front coinciding with the mid October turn point for the decline… that has seen the FTSE100 break below the 7565 support level which opens up a test of the 7530 level next and a test of the daily coral line. We are also just dipping below the 10d Raff channel as I write this, which could allow the bulls to have an early kick up towards the daily pivot and the 30m 200ema at the 7610 level.
If they manage that then the bears will probably reappear here and will be looking to drive it down towards that 7530 area. We also have S1 here and could well follow the ASX200 pattern which was similar.
7555 is also sort of support to start with as we have the daily 200ema here, hence thinking an early kick up may well play out.
The 2h chart is now bearish again after yesterdays drop, and we have the 7620 Hull MA here, and also the red coral at 7655. Should the bulls get that high then a short here is also worth a go.
Traders will be mostly waiting on the 7pm Fed speech from Powell, and some clues on the next rate move.
Above 7620 then 7658 is also the R1 and key fib level, along with that 2h coral, so lending weight to this level as resistance.
Below 7530 then 7474 is S2 which could hold though a break of 7500 is likely to ultimately head down more towards 7300 before the end of the month.
The Dax40 and S&P500 both look like they could also do a rise and dip today, and that has been the pattern a lot recently.
Good luck today.
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