FTSE 100 live outlook prediction analysis for 8th April 2020
- The drive back into the risky assets came amid hopes of a flattening infection curve in Europe, and investors ditching the downbeat positions they have adopted in recent weeks. Citi analysts said short-sellers are “increasingly under pressure” as indices climb.
- Germany’s exporter-heavy DAX has also re-joined the bulls, but Britain’s FTSE 100 remains some way behind – up just 14pc from its nadir during last month’s rout.
- Across Europe, the energy, travel & leisure and automotive sectors have all exited bear market territory.
- London’s blue-chips ended the day up 2.2pc, while the mid-cap FTSE 250 climbed 5.1pc, shrugging off news that Prime Minister Boris Johnson had been taken into intensive care.
- London’s benchmark index rose 2.19pc today to close at 5,704.45 while the FTSE 250 jumped 5.11pc to 15,568.96. In the eurozone Germany’s DAX rose 2.7pc and France’s CAC 40 rose 1.96pc.
Germany’s DAX and the top US indices re-entered “bull market” territory on Tuesday, up more than 20pc from the coronavirus-driven lows hit in March. The FTSE 100’s recovery looks more shaky, and the oil price looks set for further swings, but overall a more tranquil mood has settled. Having been in “risk-off” mode for weeks, some investors are wondering whether to dip their toes back into the water. So has the storm passed? Unlikely, says analysts, but the worst may have passed. However, the S&P is nearing the 50% fib retrace area of the entire move at 2750 to 2780 and therefore we may well see. a drop off from this area – early bears appeared at 2750 yesterday.
Virus Update
The U.K. and New York state reported their worst daily death tolls since the pandemic began even as several European nations said they planned to ease lockdowns, and Italy reported its fewest new infections since March 13. Still, parts of Europe are facing an imminent risk of critical medicine shortages. Meanwhile, China said it didn’t have any new deaths for the first time since the pandemic emerged in December, news that comes a day before the lockdown is lifted in Wuhan, where the pathogen was first detected in humans. And U.S. President Donald Trump blasted the World Health Organization, saying it was wrong to advise against travel restrictions, though he acquiesced to backlash around the world and eased a Covid-19 export ban on masks and other protective equipment. Elsewhere, U.K. Prime Minister Boris Johnson, who was moved to intensive care Monday, is in stable condition, and ministers in India have advised Prime Minister Narendra Modi to partially lift the lockdown. Also, after an initial reluctance, more countries around the world are embracing face masks. Global cases topped 1.39 million, and deaths exceeded 79,000.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Stocks in Asia extended a rally into a third day on light volumes as investors weighed signs of a slowing rate of coronavirus spread against more fatalities. Oil continued to swing ahead of a key meeting of suppliers.
Yesterday’s push higher across the board looked like a bit of a stop hunt and looked a bit fake, a fact confirmed that we dropped off again pretty sharply, and the FTSE has hit an overnight low at 5590 – testing the Hull moving average on the 2 hour chart at the time. We have seen a small bounce from this area to rise up to test the 30min coral this morning at 5695. As such I am expecting an initial drop from here down towards the 200ema on the 30min which offers initial support at 5576. Below this then S1 at 5532 and the 2 hour coral at 5537 are next up. The FTSE dropped off the second test of the 25ema on the daily at 5755 yesterday (first test was 7495 back in early Feb). The more times this line gets tested the more likely it is to break though though so the bulls will be keen to get it up to level again.
The S&P could possibly have one further push up towards the 2800 level before a bigger leg down from that area. They dropped it down from the bottom of the 2750-2780 resistance zone yesterday and the bears will need to break below the 2630 level – previous resistance now becoming support. I am expecting a further rise then dip on this though so look to short up near 2750 to 2800 again.
If the bulls were to break above the 5800 level today then in theory we are on a path towards the top of the 10 day Raff channel at 6005, though not today for that. I think that the bulls might have had their fun now though so swinging back to shorting the rallies stance, especially as we head towards the long weekend. 4 days and anything could happen virus wise over that period – get worse, get better, etc etc
So looking for a rise and dip to play out tomorrow, as long at 5580 holds early on today. Otherwise a test of the 2 hour coral looks likely at 5540 and we may see a bounce there. Bulls really need to make this stick today last chance for them to push it up again) otherwise the bears are back in control. Good luck today.
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