FTSE 100 live outlook prediction analysis for 11th March 2020
Stock markets opened with a bang yesterday, with Europe’s top indices picking up the pace set in Asian trading to rack up gains of more than 4pc in the first hours of trading. For a moment, it appeared that a comeback was on the cards – in London, energy giant Shell racked up double-digit gains, while peer BP also began clawing back ground lost during Monday’s multi-trillion rout.
The oil majors both ended up, with Shell adding 43.2p to £13.48 and BP gaining 10.7p to 328.9p. But cracks began to show across wider markets shortly before midday, and it became clear the so-called “dead cat bounce” – when the value of a stock or index jumps the day after a major drop – was living up to its name. The Stoxx 600 cut a downwards arc, and by 3pm had found itself back in negative territory.
By the end, Europe was in the red across the board – with the FTSE 100 ending in the red by the narrowest of margins, down 5.5 points at 5965.8. The FTSE 250 – which has tracked its blue-chip sibling fairly closely across recent sessions – flatlined. There were a number of possible reasons for the drop: abundant nerves, bearish investors seizing the opportunity to exit positions in anticipation of further drops and the possibility that some selling off took a delayed effect could all have played a role.
Virus
The window for fully containing the coronavirus has passed in some parts of the U.S. and the White House will roll out plans to mitigate its impact later Tuesday local time, Centers for Disease Control and Prevention Director Robert Redfield said at a hearing in Washington. “In general, we’re in a containment, blended mitigation,” Redfield said. “In some areas we’re in high mitigation.” The White House’s decision to release a plan is an acknowledgment that efforts to track down and contain individual cases have failed in some places, and that the coronavirus is spreading from person to person. New York has become one of the first U.S. states to try to limit the movement of large groups of people, while Italy is attempting a nationwide lockdown — cases have topped 10,000 there. And in the U.K., health minister Nadine Dorries has been diagnosed with the virus. Globally, 117,000 cases have been recorded and deaths exceeded 4,200. On Tuesday Chinese President Xi Jinping visited the coronavirus epicenter of Wuhan for the first time since the disease emerged, in a sign that China sees the virus under control.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Once again that was a pretty wild ride yesterday, and the bulls failed just shy of the 6242 resistance level before we saw another sell off to a low of 5925, which is now where we are again, after another rally to 6162. For today we may well see some more bearishness but we do have the budget later and may see some stimulus measures announced. That may give the bulls something to latch onto for a rise back towards 6100/6200.
Initial support this morning is at 5908 but S1 at 5858 looks like it will be a better bet for a tentative long. Should the bears break this then 5800 is next up and the possibility for the slide to continue down towards the 5500 area looks like a distinct possibility. The bottom of the Raff channels are both just above here currently, at 5525. S3 for today is at 5502 – I’m not sure we drop 400 points today though.
For the bulls, there is initial resistance on the 30min chart at the daily pivot at 6045, then 6066 above that where we have the 30min coral. This area looks to be worth a short if seen. Above this we also now have the 2hour coral coming into play at 6173 and would be the first test of that since it turned bearish on Friday. Again, a short at this 6170 level is probably worth a go.
So for today I expect it to be another wild one, and watching the 5910 area as initial support then 5800 below that. For resistance 6050ish initially, with 6170is above that. Not much more to say apart from hold on tight!
Just after writing this:
Bank Of England Cuts Main Interest Rate To 0.25% From 0.75%
-Maintains Gilts Purchase Target At 435 Bln From 435 Bln
-Maintains Corporate Bond Purchase Target To 10 Bln From 10 Bln
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