FTSE 100 live outlook prediction analysis for 25th August 2020
The FTSE 100 closed firmly in the green yesterday, here is a reminder of the day’s main events:
- Stocks soared on renewed hopes for a coronavirus vaccine and some easing of tensions between the US and China.
- Mike Ashley swooped on arch rival Dave Whelan’s sports empire, buying some assets of DW Sports, which went into administration earlier this month
- Tesco announced plans to create 16,000 new jobs amid a boom in demand for online grocery shopping during the pandemic
- The video chat system Zoom was investigating a rare outage that has left many people unable to make video calls as they are working from home
- Educational publisher Pearson appointed ex-Walt Disney executive Andy Bird as its new boss
US stocks also rose strongly, pushing on from last week’s rally as investors cheer vaccine developments and some easing of tensions between the US and China. S&P hits another record high and overnight has tested the 3450 level. 3470 resistance is the next main area to watch. The FTSE 100 futures have managed to hit the 6139 resistance and had a slight stutter there so far.
Reinfection and Aftereffects
A man was infected with the coronavirus for a second time after recovering from an initial bout in April, in what scientists said was the first case showing that re-infection may occur within a few months. The 33-year-old’s second infection was detected via airport screening on his return to Hong Kong from Europe this month. Among those who survive the illness, there is an expanding population of so-called long-haulers left with debilitating conditions long after “recovery.” It’s now known that SARS-CoV-2 will leave a portion of the more than 23 million people it’s infected with a litany of physical, cognitive and psychological impairments, like scarred lungs, post-viral fatigue and chronic heart damage. What’s still emerging is the extent to which the enduring disability will weigh on health systems and the labor force. That burden may continue the pandemic’s economic legacy for generations, adding to its unprecedented global cost — predicted to reach as much $35.3 trillion through 2025.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
U.S. and European futures climbed alongside most Asian stocks Tuesday on optimism about treatments for the coronavirus and signs of progress on trade negotiations. The offshore yuan strengthened and the dollar slipped.
Stocks rose in Japan, Australia and South Korea, fluctuated in China and dipped in Hong Kong. S&P 500 futures advanced after the benchmark notched another all-time high, with companies that benefit from a more robust economic recovery leading gains. The Nasdaq Composite closed at a record for a second straight session. Ten-year Treasury yields ticked higher, while their Chinese counterparts rose the most in seven weeks.
Overnight we have tested the next resistance level we had from yesterdays analysis at 6140 and seen a small reaction so far. The 30min chart remains bullish and we have dropped back to the coral support line at 6118 to start things off this morning. If we get a retest of the 6140 level initially then we may well see another reaction here and a drop down towards yesterdays close at 6104, and possibly the daily pivot at 6080. We also have the 200ema here for support on the 30min.
If that holds then we may well see the bulls push on again, as in theory the S&P will want to rise towards the 3470 level next, if it can build on yesterdays gains. 3470 looks like pretty decent resistance if seen as we also have the top of the 10 day Raff channel, just below that at 3465. Ergo if we get a rise to this area then a short here to reduce the daily overbought RSI would make sense, before another push higher.
For the FTSE support below the 6080 level is showing on the 2 hour chart at the 6035 level where we have both the 100 Hull MA and also the coral line. As such, should we get a bear Tuesday and drop this low this area may well see some support. The bulls will certainly be keen to keep the momentum going for the time being, and the vaccine hopes are certainly helping. That said, news that you can get reinfected, albeit with a different strain, does scupper vaccination somewhat!
Below 6030 and then I would be expecting a retest of the 5950 level, and then 5900 below that. Not expecting that today though as the bulls maintain the upper hand. Famous last words!
Above 6200 and then we have a bit of white space till R3 at 6271, and then the top of the 20 day channel at 6320. Again, not expecting these outer reaches to be seen.
So, mainly looking at 6080 for support, with 6030 below that. For resistance a retest of 6140 initially, then the 6200 area. 2 hour chart remains bullish so maintain that bias for the moment but watch 3270 for the S&P should it hold above the 3440 level. Good luck today.
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