Technical analysis for FTSE 100 for 5th October 2023
The FTSE 100’s slump deepened yesterday as oil giants were hit by the bond market sell-off. The UK’s blue-chip index, which is heavily weighted toward energy, fell more than 1.15pc in afternoon trading, while the midcap FTSE 250 tumbled as much as 1.38pc today.
The FTSE 100 was dragged down by heavy falls in oil majors Shell and BP, which were down 2.2pc and 3.3pc respectively amid falling oil prices. The internationally-focused index narrowed its losses at the last minute, closing 0.77pc lower at 7,412.45. The FTSE 250 ended down 1.05pc at 17,492.90.
However, having tested the 7390 level we may well see bounce today.
Asian shares rebounded from 11-month lows on Thursday as a plunge in oil prices and softer U.S. labour data helped pull Treasury yields off 16-year peaks, although a looming U.S. payrolls report could make or break the rally.
Tracking overnight gains on Wall Street, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6%. Japan’s Nikkei climbed 1.2%.
Hong Kong’s Hang Seng index advanced 0.3%. China’s mainland markets remain closed for holidays.
FTSE 100 technical analysis for today, 5th October 2023
Well we finally got the test of the 7400 support level and have seen a positive reaction here, with some more buying overnight. Initially today we may well see a dip down to retest the 7400 level as we are just hitting 2h Hull MA resistance at 7440 to start with, so a drop down and then a bounce would fit well.
With the strength in the S&P500 as well from 4200, that should follow through into more upside today which will drag the FTSE100 up with it.
Ultimately we may well see a test of the 7490 area to test the red 2h coral, and the 30m 200ema at 7500. Buy the dip today basically which is also what played out on the ASX200.
If the bears were to break below the 7390 level then 7373 is the next key support area with the key fib and S1 here, so should see a bounce. Especially so if the S&P500 doesn't sell off hard again today. We also have the bottom of the 20d Raff here so I would like to see any test of this area hold, though that does set up a lower low for the week which isn't a great sign for more upside today and tomorrow.
That said I don't think we will see that level today and am more inclined to go with a bit of a bullish day overall today, especially as we had the decent bounce off the 7390 level yesterday.
Resistance wise, then above 7480 7500 is the next key level as mentioned, with 7537 R2 above that. Might be a bit of a big ask for today as the bulls are a bit bruised from their recent mauling, so 7500 may well cap any rises today. The 10d Raff channel is still heading down as well, and looking at the daily we have bearish MAs, with the 7538 level as resistance from them today - aligning with that R2 level.
So, stay nimble again, looking for a dip and rise, and keep an eye on a test of the 7400 level.
Good luck today.
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