Quote from Nick on 28th May 2021, 10:34 am

FTSE 100 live outlook prediction analysis for 28th May 2021

Taylor Wimpey dropped to its lowest share price in almost three months, as housebuilders weighed on the FTSE 100 yesterday. The fall follows reports that blue-chip Taylor Wimpey is facing extra repair costs for a defective London housing block which won’t be covered by the £165m it has already set aside for potentially unsafe legacy developments following the 2017 Grenfell Tower tragedy.

The benchmark was also dragged by oil majors BP and Royal Dutch Shell, which fell 4.15p to 306.55p and 26p to £12.89, respectively, as the price of oil edged higher.

The FTSE 100 traded flat, closing down 7.26 points to close at 7,019.67, though miners added some hope on the back of rising metal prices.

Midcaps had a better day, outperforming blue-chips for a third straight session. The domestically focused FTSE 250 index rose 18.96 points to 22,659.04. Aero and defence stocks added 1.7pc, led by Meggitt which gained 3.1pc, or 15p to 500p, after UBS upgraded the stock to “neutral” from “sell”.

Asian Session

Asian stocks rose along with U.S. equity futures Friday after solid economic data and President Joe Biden’s federal spending plans spurred a Wall Street rally in cyclical shares. Treasury yields climbed. Japanese shares led gains and MSCI Inc.’s Asia-Pacific equity gauge was set for the highest close in a month. Earlier, industrial and financial shares fueled a modest overall increase in the S&P 500, while small-caps outperformed and the tech-heavy Nasdaq 100 slipped. European contracts were in the green.

U.S. data included a drop in jobless claims to a fresh pandemic low. Biden is reportedly set to unveil a budget that would take federal spending to $6 trillion in the coming fiscal year.

The 10-year U.S. Treasury yield reached 1.62% amid growth optimism and concerns of more debt supply to fund spending. The dollar was steady and the yen fell as Japan recommended extending a state of emergency that spans Tokyo to curb infections. China signaled the yuan’s recent appreciation is too rapid with a weaker-than-expected reference rate.

Global stocks are set to climb for a fourth month. The economic rebound from Covid-19 is a bulwark for sentiment, and comments from Federal Reserve officials have helped temper fears that inflation could spark a faster-than-expected reduction in stimulus. Treasury Secretary Janet Yellen said she sees the burst in prices as temporary, though likely to last through the end of 2021.[Bloomberg]

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

Another fine hold of 7000 yesterday and banking at 7028 felt like the right thing to do ahead of the overnight session. However we have have pushed up a bit further and now 7028 is looking like decent support on the 30m chart, with the daily pivot, 200ema and a coral support line all converging here. As such, if the bulls can use this level as a launch pad then we should get a rise towards the 7075 level again, and possibly as high as R3 7103 ahead of the long weekend.

Bank Holiday in the UK on Monday so no email that day.

I am thinking that we will see a small dip and then a rise across the board today, and also watching 15435 on Dax and 4203 on SPX as the main supports to start with. If the bulls can defend those levels then we should get a decent rise.

For the FTSE, below the 7028 support then 7000 is next up again, with S1 just above at 7008. Then the fib and S2 at 6980 is next up and also daily support here. So this is the line in the sand and a breach of this will likely see a slide down towards 6930 or lower.

However, if the 7028 holds then we should see 7055 initially, with R1 here. The 2 hour chart has gone bullish now, and also has support at 7037, while both the Raff channels on the daily chart are heading up again. Despite the early wobble in May on inflation fears, its held up pretty well, though the FTSE hasn't moved around too much and continues to underperform other indices. Bit more upside on the cards into June by the look of it now.  That said, the top of the 20d Raff on the S&P is now at 4295 so we could see some bearish reaction there. They may wheel out the inflation news again as the catalyst - it seems most realise is about 15% in reality at the moment, across the board. The key will be if it stays at that level and the effect that has.

So, let's see if the bulls can defend the supports and build on that overnight rise for a decent showing ahead of the weekend. 7028 looks key to start with so keep an eye on that level. Good luck today and have a great weekend.

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