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Bear Tuesday as we drop from 7130 | 7030 7011 6992 support | 7080 7117 7167 resistance

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

The FTSE 100 closed higher yesterday despite the drop off 7130, with major banking and energy companies leading the gains. The blue-chip index rose 0.2pc, with BP gaining 3.1pc after saying that nearly a third of its British petrol stations had run out of the two main grades of fuel.

HSBC, Barclays, Virgin Money UK and Standard Chartered all closed higher, tracking higher benchmark bond yields amid rising inflation concerns.
But the biggest winner was Rolls-Royce, which jumped more than 11pc after it secured a US Air Force contract to supply B-52 bombers and agreed to sell its Spanish unit ITP Aero for €1.7bn.

The domestically focused FTSE 250 rose 0.1pc, with travel and leisure stocks among top gainers.

Oil prices jumped to three-year highs on Monday in the latest sign of a global energy crunch. Brent crude rallied 2.3pc to $79.80, its highest price since October 2018. Analysts at Goldman Sachs said Brent, which is based on the North Sea industry, could rise to $90 per barrel by the end of the year.

Gas prices have rocketed to all-time highs in recent weeks due to weak global production, low exports from Russia, poor storage levels in the UK and elsewhere in Europe, and rising demand from economies emerging from lockdowns. High gas prices increase demand for oil-burning to generate electricity.

The world's biggest independent oil trader, the Vitol Group, said it expects global demand for crude to climb by 500,000 barrels a day this winter. The Organization of the Petroleum Exporting Countries (OPEC) agrees there will be a surge in demand but expects that number to be slightly lower, at around 370,000 extra barrels a day.

The lifting of restrictions on UK and EU visitors to the US in November is also expected to drive up prices, as the resurrection of trans-atlantic travel lifts demand for jet fuel.

FTSE 100 live outlook prediction analysis for 28th September 2021

That was a decent drop off the 7130 level yesterday and that is the line in the sand that the bulls will need to break now. Likewise with the 4480 level on the S&P500. Initially today we have resistance at 7117 with R1 here and just below the key fib at 7124. As such, this area may well be worth a short again.

The bulls defended the 7040 level again yesterday and it looks like they will need to defend again today otherwise a slide down to the S1 at 7029, and possibly the daily support at 7110 level below that may well play out for a bit of bear Tuesday. The negative news flow (and doom and gloom by the media - "Winter of Discontent" indeed) isn't having too much effect on the FTSE100 so far.

If the bulls can push past the 7130 level then we should be on for a rise towards that 7200 level again. We do have R2 as a hurdle to clear at 7168 first though.

I am thinking that we will get a rise dip rise play out today. The ASX200 had a pretty bearish session, dropping down to S2 before stabilising. If the S&P bears have their way then we may well see a slide on that down to the 4426 2h coral, and possibly a slight overshoot to 4420 where we have S1 and the key fib. Anywhere around that area looks good for a long.  That 2h coral line is rising though so if the drop is gradual during this morning it may well have risen to around the 4430 level as the US opens. Initial resistance from a red 30m coral and the daily pivot at 4451 to start with today as well. Watch that 4420-4430 zone for support and worth a long here.

If the bears break 7011 then 6992 is S2 (and back at the level that held well on previous tests, til it didn't) and below that a possible slide to 6932 for the next daily support. That said, having fought valiantly to get it back above 7000 the bulls will be keen to keep it here. It's possible that we have seen the short term low for the moment at 6830 and we can start to build up some strength towards the end of the year now.

Good luck today, watch 7117 (7130 too) 7168 as resistance, 7030 7010 as support.

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