FTSE 100 live outlook prediction analysis for 14th August 2020
Here’s a quick recap of yesterday’s events:
- It was a poor day for Britain’s top stock indices, with London’s blue-chips feeling the impact of a slew of stocks trading “ex-dividend”, meaning investors who bought their shares would not be entitled to the companies next payout.
- BP, Shell, Diageo, AstraZeneca, GSK and Legal & General were all among those trading ex-divi.
- GVC Holdings was the only blue-chip to release results, briefly leading risers on the FTSE 100 after posting consensus-beating guidance but scrapping its interim dividend.
- Wall Street opened mixed, with the Dow sliding 0.4pc, despite data showing new weekly claims for unemployment benefits fell below one million for the first time since the coronavirus pandemic struck in March.
London’s benchmark index closed 1.30pc lower to 6,198.19 while the FTSE 250 fell 0.75pc. Most of today’s weakness has been reflected in the oil and gas sector after the IEA downgraded its outlook for oil demand due to concerns about the outlook for air travel, with Royal Dutch Shell and BP under pressure after three days of decent gains. The Stoxx 600 index dropped by 0.5pc, with small losses in Frankfurt and Paris.
Muted Markets
Asian stocks looked set for a muted start Friday after a lackluster U.S. session as investors mulled the stalemate in stimulus negotiations and parsed signs of an economic recovery. Treasury yields rose to an eight-week high after the government sold a record amount of 30-year bonds. Futures were little changed in Japan, Australia and Hong Kong. S&P 500 futures were also flat and the Nasdaq Composite Index closed in positive territory. Trading volume was about 20% below the 30-day average. Gold resumed its advance, and the dollar slipped against a basket of its peers. Elsewhere, oil fell the most in nearly a week as investors assessed the International Energy Agency’s reduced forecasts for global oil demand, in part due to a slowdown in air travel.
Serious Shrinking
Japan’s pandemic-hit economy shrank last quarter by the most in records going back to 1955, official data is set to show Monday, with a resurgence of the virus threatening to slow a fragile recovery now underway. Analysts see gross domestic product contracting at an annualized pace of 27% in the three months through June. That means the world’s third-largest economy will have declined in size for three straight quarters, hit first by trade wars and a sales tax hike, then by the virus.The cratering of Japan’s economy follows grim readings from other major countries reeling from the impact of Covid-19. The U.K. contracted 20.4% last quarter. The U.S. shrank by nearly a third.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks drifted Friday as investors mulled the stalemate in stimulus talks in America and parsed signs of an economic recovery. Treasury yields steadied near an eight-week high and oil headed for a second weekly gain.
We didnt quite manage the 6150 support level yesterday, even later in the day, bouncing off 6161 instead and a test of the 200ema on the 30min chart. As such. the bulls have brought this back up towards todays pivot level of 6200 and a push towards the 6238 level looks like it might well play out next. There are a few indictors here showing it as resistance to start with today, namely the Hull moving average, R1 and a key fib. As such we may well see a reaction here first thing if we rise above 6200 to start with today. Above this level then the bulls will be looking to target the 6266 and then 6323 above that where we have the top of the 20 day Raff channel.
Support initially is at 6180 to start with today, and in fact this level has held overnight already. Should the bears break below this then a drop down to that 6164 200ema level would likely happen. Below that then the 6130 area is now the 25ema support on the daily chart, with the daily chart having gone bullish again with the (somewhat surprising!) strength in the FTSE 100 this week. The 2 hour chart does remain bearish for the moment though, with that 6238 resistance level in play. The coral is green though and providing support at 6192 as I write this.
As its Friday it can pay to be a bit more cautious, and to do lower stakes as they can sometimes be a bit odd, even more so in a low volume August.
The S&P bulls are still hanging in there, but once again failed to get to the 3399 resistance level that remains in place. Above this then the 3413 R3 level is next up and if they really go for it an overshoot to that level before dropping back may well fit quite well.
So, looking for a rise towards the 6238 and possibly 6266 today, and those are my two main resistance levels. For support I am looking at 6180, then 6130 and finally 6060. Good luck today and have a great weekend.
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