Technical analysis for FTSE 100 for 7th February 2024
The FTSE 100 touched a near four-week high on Tuesday, propelled by a blowout profit forecast from BP as it raised share buybacks, while China-linked stocks surged after the world's second-largest economy pledged stock market support.
The blue-chip FTSE 100 snapped its longest losing streak since October 2023 to rise 0.9% and the mid-cap FTSE 250 index climbed 0.8%.
BP topped the FTSE charts with a 5.5% jump after the energy major posted forecast-beating earnings of $3 billion for the fourth quarter and boosted share repurchases. The stock hit a two-month high and logged its best day in a year.
Broader oil and gas shares rose 2.2% to their highest in a month, also supported by an uptick in crude prices.
Meanwhile, a survey showed British retailers reported sluggish sales in January as shoppers remained cautious about spending, underscoring how high inflation and borrowing costs are weighing on households.
Bank of England Chief Economist Huw Pill said on Monday that the question now for most of the central bank's policymakers was when it would be appropriate to begin to cut interest rates, not if.
Asian stocks firmed on Wednesday as investors waited to see if Beijing's increasingly frantic efforts to prop up its sagging share markets would actually work, while bonds enjoyed a reprieve from recent selling.
In recent days, China's regulators have announced further curbs on short selling and state investors said they were expanding their stock buying plans. Bloomberg News also reported President Xi Jinping would discuss the stock market with financial regulators, though there was no confirmation this had happened or what was discussed.
However, the jury is very much out on how effective all this will prove and the blue chip index inched up 0.4% in choppy early trade, while Shanghai stocks added 0.9%.
EUROSTOXX 50 futures and FTSE futures both added 0.1%. S&P 500 futures and Nasdaq futures were trading near flat.
FTSE 100 technical analysis for today, 7th February 2024
We have had a brief foray above 7700 overnight which bodes well for some more upside to test the 7735 resistance level. That level is showing on the daily timeframe, and also just above R1 and the key at 7725 for today. The charts for the FTSE100 all look positive to start with as we have a bullish 2h and daily Raffs continue to head up.
Support on the 2h chart is at the 7650 level with both the now green coral and the Hull MA here. If we were to drop down to this level then I would like to see this hold for a bounce.
Initially the 30m chart has the green coral at 7690 which may well act as the initially catalyst for a climb to that resistance area. The Dax40 and S&P500 also look like we may well see a rise and dip play out initially.
Above the 7735 level then the bulls would be aiming for the 7753 R2 but ultimately 7800 would be on the radar. 7805 is R3 and the top of the 20d Raff channel. Tthe next daily resistance level of note is at 7850 though not expecting that today! Also note that the top of the 10d Raff channel is at 7771 so we could in fact see a stutter here if it were to break 7753.
Support wise then 7650 as mentioned though below this the bears would probably have some desire to drop down to the bottom of the 10d Raff channel at 7617, and we also have the 25ema there on the daily. Any move below that would likely then test S2 at 7590 is fairly short order, and with that being around the recent low on Monday, should in theory see a bounce.
Decent day yesterday with the various levels across the board so let's hope for more of the same today!
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