FTSE 100 live outlook prediction analysis for 27th February 2020
The bulls worked hard yesterday buying the FTSE up to the 7030 resistance level from the bottom of the 10 day Raff channel at the 6880 support level. The bulls had broken the 6930 support initially, but despite the virus worries the markets rose. Different story overnight though, with everything selling off once again and the FTSE testing 6855 now, and the bottom of the 20d Raff channel here.
Market wrap
The FTSE 100 arrested days of falls to close in the green, as nerves calmed following days of sharp, coronavirus-driven dips. It closed up 0.35pc to 7,042.47, recovering from its fall below 7,000 points earlier in the day, while the wider FTSE 250 ended 0.45pc lower at 20,622.95. The healthcare, utilities and financial sectors boosted the blue-cap index as London today as housebuilders tumbled. The Dow and S&P 500 popped 1.5pc, before paring gains to trade up 1.25pc as of send time; dragging European equity markets back from the brink with their strength.
Housebuilder Taylor Wimpey was the biggest faller among blue chips, dropping 6.6p to 212.4p after reporting a fall in profits. Weir Group was the biggest riser among mid-caps, after it unveiled plans to ditch its struggling oil and gas operations and beat profit estimates. Its shares ended the day up 140.5p at £13.91.
Virus Outstrips China
In the last 24 hour period, there were more coronavirus cases in other countries than in China, the World Health Organization said. It’s a significant development — this is the first time infections elsewhere have outstripped those in China since the initial patient was identified on Dec. 8. New infections were diagnosed in countries from Pakistan to Brazil, which reported the first case in Latin America, while Italy and Iran confirmed additional patients with the disease. Germany also said it was likely at the start of an epidemic, and 700 people remained confined in a hotel in Tenerife, one of the Canary Islands. So what does all that mean for the world? For the U.S., at least, one top American health official said the increase in outbreaks outside China will make it harder to keep the virus outside the U.S. President Donald Trump and federal health officials plan to brief the public Wednesday evening in the U.S. on efforts to prevent the spread of the pathogen. Thus far, 2,771 have died and 81,233 people have been infected globally. It’s leading some to question: Is this a pandemic?
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
We have had a large drop overnight retracing the rise yesterday and a little bit more and have dropped down to the bottom of the 20d Raff as I write this, and its support at 6855. As such I am expecting an initial climb this morning with 6918 as a potential stall point. Above this we also have the daily pivot at 6943 which the bulls will need to break. I really wouldn’t be surprised if we surpass the 7030 resistance level in the next 24 hours though. Thursday’s Asian session was rather bearish but I am thinking a bit more positive for us for today, and am thinking that we generally see a bit of a rise.
Support below the 6855 level is at the 6766 level though, so should the bears get their mojo on and break below 6855 we will probably head to that and my bullishness for today is misplaced. There is also daily support at 6730 which may see a reaction should we get that low.
The S&P daily chart has gone bearish properly now (not much of a surprise), with 3276 as resistance so a rise tow that and then further downside from that area would fit in well. We also have the top of the 10 day Raff channel there as you can see in the charts below, and having started a bounce off the bottom of that this morning at 3057, we may just see a decent rise on that. Virus fear still pervade though for the moment, but according to official data, there were more cases outside China in the last 24 hours. This may be significant if rate of infection is slowing in ground zero – measures are working. Fortunately the message has got through as people have woken up a bit more to the threat and the need to protect themselves.
With he 30min coral at 6918 we may drop off that but I have put a short off the pivot in the plan, just in case we overshoot and with the extra volatility. The 7030 resistance certainly held well yesterday and if it wasn’t for that divi I probably would have held longer. As it happened the divi didnt manage to push it much past that level anyway.
So, cautiously bullish for today…..
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Decent drop off the 6942 there!