Rebounds then retracts | Elastic Band Time | 7060 7025 7013 support | 7128 7165 7202 resistance

Rebounds then retracts | Elastic Band Time | 7060 7025 7013 support | 7128 7165 7202 resistance

FTSE 100 Analysis | Trading Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

The FTSE 100 rebounded on Wednesday, helped by comments from the World Health Organisation’s chief scientist, Dr Soumya Swamina, that vaccines will likely protect against severe cases of the omicron Covid-19 variant.

The blue-chip index ended 1.6pc higher at 7,168, clawing back yesterday’s losses, propped up by a strong performance from banks, oil and mining stocks.

Asian stocks were steady and U.S. equity futures climbed Thursday, shrugging off a weak Wall Street close amid questions about how much of a threat the omicron coronavirus strain really poses.

MSCI Inc.’s Asia-Pacific gauge fluctuated, while S&P 500 and Nasdaq 100 contracts rose. The World Health Organization said vaccines will likely protect against severe cases of the variant and Australia’s chief medical officer said there’s no indication the variant is deadlier than other strains. European contracts declined.

In Hong Kong, an index of Chinese technology shares retreated amid Beijing’s plan to close a loophole used by tech firms to list abroad. Some suppliers to Apple Inc. slid on a report that the firm informed component suppliers of weakening demand for the iPhone 13 lineup.

Omicron Protection
The WHO said vaccines will probably protect against severe cases of the omicron variant as the mutation spreads to at least 21 countries, including the U.S. The Centers for Disease Control confirmed a case in Californiacaused by the new variant, from an individual who returned from South Africa on November 22. Elsewhere, Japan asked all airlines to halt inbound bookings for this month after confirming its second omicron case; China’s latest outbreak worsens; and South Africa’s daily cases almost double as omicron takes hold.

FTSE 100 live outlook prediction analysis for 2nd December 2021

A slightly overdone sell off yesterday afternoon in the US with the S&P dropping down to the 4500 level. A flush before a rise maybe. Overnight has seen the bulls fight back and the S&P is at 4550 as I write this and the charts bode well for a similar play to yesterday with a slow steady rise, possibly after an initial dip again.

The FTSE 2h chart remains bullish, and the 7057 support level has held to get us back up to 7120 first thing this morning, albeit with a slight overshoot to 7025. However, we are now at the 200ema on the 30m as initial resistance 7128 so could well see an initial dip of this before more upside from the 7070 level again.

If the bulls can break above the 7128 level then we should see a rise towards the key fib at 7162, and possibly a test of that 7200 daily resistance level above that. The FTSE has actually held on pretty well in the face of the US sell off yesterday and didnt follow it down to the same extent. Which suggests some more strength to come. Holding above the 7000 level still bodes well for the FTSE100. 7162 is the key fib and also around the R1 level 7172 so we could see any rise stutter here, and possibly the bears have another go.

If the bears were to break below the 7070 level then a drop down to the overnight low at 7025 would likely play out, as we have S1 down at 7013 for today. However 7054 is the key fib support, along with the Hull moving average on the 2h, so they may not be able to get it that low. They will also be keen to defend 7100 have regained that overnight.

So, those are all the main areas for the FTSE100. For the S&P500 the bulls need to build on this bounce and break above 4570 (and dropping, so later on will be nearer the 4565 area) which is the 2h resistance level now. Bears may well appear here again to try and repeat yesterday. They will be looking for a move below 4500. If the bulls can break above 4565 though then we should get a rise towards the daily resistance at 4620 next.

So, bit of a mixed bag and the news flow veers from negative to positive still. I think a dip rise dip could play out again today, especially as that US drop was overdone yesterday. Unfortunately it does put the cat amongst the pigeons somewhat and will unsettle the bulls.

Good luck today, stay nimble!


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