FTSE 100 live outlook prediction analysis for 27th May 2020
Mid-caps jumped on Tuesday as investors reacted to a loosening of lockdown restrictions. A motley crew of retailers, travel firms and pubs – many of which had been among the worst-hit stocks during the recent market tumult – chalked up big gains, after Boris Johnson said on Sunday that all non-essential retailers would be allowed to open on June 15.
The easing is the first clear sign that the Government is looking at peeling back the tight lockdown restrictions that have led to widespread closures.
A wave of easing from other countries added to the mix, sending the FTSE 250 up more than 3pc to 16,933.4 points, leaving it as one of Europe’s top-performing indices, with a slew of companies chalking up double-figure percentage point gains.
The FTSE 100 also shot out of the gates, but lost momentum as the day went on, ending up just 1.2pc at 6,067.8, roughly in line with its continental peers. Travel stocks led both indices, as Germany and other countries began to loosen flight restrictions.
Here’s a quick recap of today’s events…
- Further easing of coronavirus lockdowns pushed equities higher
- Key European markets were all 1pc or more higher at the closing bell, with London playing catch-up after a strong eurozone performance on Monday.
- The German DAX was propelled to its highest levels since early March
- Travel stocks led both indices, as Germany and other countries began to loosen flight restrictions
- The US dollar took a beating across the board today while the pound held up well despite another set of disappointing retail sales numbers for May from the CBI
U.S. Sanctions
The Trump administration is considering a range of sanctions on Chinese officials, businesses and financial institutions over Beijing’s effort to crack down on Hong Kong, according to people familiar with the matter. The Treasury Department could impose controls on transactions and freeze assets of Chinese officials and businesses for implementing a new national security law that would curtail the rights and freedoms of Hong Kong citizens. Inter-agency discussions are ongoing and no decision has been made on whether or how to employ the sanctions. The news shook equity markets. Meanwhile, President Donald Trump believes Hong Kong will lose its status as Asia’s financial hub if the new law proceeds. And Hong Kong is bracing for what could be its biggest day of protests in months, with pro-democracy groups calling for a general strike.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks were mostly higher after a mixed start Wednesday, as investors weigh hopes for economic recovery against deepening U.S.-China strains. The yuan retreated. Japanese shares led gains, with news on plans for a second fiscal-stimulus package giving fresh encouragement for bulls. Futures on the S&P 500 advanced, after the index closed at an 11-week high. Jamie Dimon, head of America’s biggest bank, counted himself among the optimists Tuesday, saying there could be a “fairly rapid recovery.”
The S&P failed just shy of the 3030 resistance level yesterday and despite staying above 3000 for most of the session, closed just below. As such, the bears will probably be fuelled a bit by that, despite the fact that overnight we have moved back up, with 3030 still remaining as resistance. For the FTSE 100 yesterday we had a much better drop off the 6155 resistance level in the end, down 1000 from it at one point, but the 200ema held as support.
Initially it’s bullish to start with today, with the 30min chart offering support at the 6080 level, with the moving average here. If the bulls can remain strong to start with we should also get the coral trend line going green, and support at 6075 on that. That would suggest an initial push up towards the fib and R1 area at the 6130 level. If the bulls break that then a double top with 6155 is likely, and then I am thinking that we may well get a push up to that higher resistance level at 6186.
There is more chatter today about the V shaped recovery that we have all been banking on, so fingers crossed for the multitude of businesses that pans out. If so then we may well see further upside. As you may know stock markets generally look 6 months ahead, so the rise from the March lows would suggest that a V will play out.
For the bears today, if we break below the 6075 then the fib level and 200ema at 6036 and 6050 area respectively are the next levels to watch for support and then S1 at 6011 below that. I think the fib at 6036 will hold though, and maybe worth a long here as well, but with a tight stop.
I am thinking that we get a rise and then a dip towards the end today, as the bulls bringing it back towards 6100 suggests they have the upper hand. I am watching the S&P as well for a test, and possible overshoot, of the 3030 level as well before a drop back. A break and hold of 3030 could well see a rise towards the top of the 20 day Raff channel at 3113 though.
Good luck today.
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