FTSE 100 live outlook prediction analysis for 12th May 2020
Global stock markets made a pretty poor start to the week, with widespread losses across Europe and Wall Street as investors digested a smorgasbord of conflicting approaches by international governments to tackle Covid-19. After rising at the start of the session, Europe’s top indices quickly gave up their gains, flipping negative by the mid morning.
The FTSE 100 and 250 outperformed their continental peers, with the blue-chips handed a boost by a falling pound and some strong performances by consumer-facing stocks such as British American Tobacco, Reckitt Benckiser and Diageo. Airlines put a drag on the index, however, as the industry vented its spleen against the Government’s plans to place travellers arriving via the UK’s airports into a 14-day quarantine – a proposal that industry leaders said undercuts their plans to return to regular operations,
Here’s a quick summary of yesterday:
- Key eurozone markets were down at the close, having given up early gains.
- London manages to edge into positive territory in the final minutes of trading as the pound weakened.
- Reports from South Korea and Germany show that new cases have jumped amid the easing of restrictions.
- Gold was up less than one percent on the day, while the yen weakened against the dollar.
Virus Update
President Donald Trump declared at a White House news conference Monday that “we have prevailed,” as U.S. deaths from the disease exceeded 80,000 — a remark he later said pertained only to testing for the infection. New York state will begin to reopen in some regions on Friday, though New York City, the U.S. epicenter of the coronavirus outbreak, will likely see its lockdown extended into June. Meanwhile, Wuhan, where the epidemic began, reported its first new infections since the Chinese city ended its 76-day lockdown last month. South Korea reported a flare-up in cases tied to nightclubs in Seoul, and officials are trying to track more than 5,500 people. Over in Europe, Italy reported the fewest new cases since March 4. Russia reported a record number of new cases in one day as it emerged as a new hub of the outbreak in Europe. France, Switzerland and Greece are loosening restrictions. The U.K. outlined a plan to ease the country’s lockdown in phases, as its premier urged Britons to prepare for a new normal, but the government’s return-to-work advice sparked confusion. Elsewhere, Prime Minister Shinzo Abe’s government is following the U.S. in speeding up the approval of still-unproven virus drugs, as he faces new criticism over his plan for exiting a state of emergency and reviving Japan’s economy. And Elon Musk is flouting California county law by reopening his Tesla plant, daring authorities to arrest him. [Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
We got the dip and rise yesterday though we dipped a bit lower on the SP, testing the 2900 level before bouncing back, and 5900 on the FTSE 100. For today, the 2 hour charts are all bearish as a result though we have been weak overnight. The bulls will be keen to keep the FTSE above the 5900 level (and the S&P above 2900) otherwise we are looking at a slide down towards the 5840 level. There is also a chance that we see a slide towards the bottom of the Raff channels, currently around the 5600 area, especially if the “sell in May” starts to gather pace. On the upside, if the bulls can keep the momentum going then we should be on for the 6075 area at some point soon, before a possible slide from a bit higher up.
That’s the wider levels out the way, so for today I am looking at initial support at the 5900-5920 area where we have the 200ema on the 30min chart and also the fib level and S1 just above the 5900 area. Despite the weakness overnight, with the charts having gone bearish yesterday evening, we have seen a bit of an initial climb back up from the overnight lows. As such I am looking at a possible rise this morning to test the 5977 area, where we have the fib level as resistance initially. Above this R1 is at 6015 and then the daily at 6035. Should the bulls push past this then the 6075 level as mentioned is next up. They couldn’t really get it past 6000 yesterday, with a sharp recoil from that level so they will certainly have their work cut out.
The daily charts remain bullish for the moment so the S&P will certainly be keen to test that 3000 level, and with the top of the Raff at 3012 and 3020 we may well see a push towards that area. However, that said it is starting to look a little bit more bearish. Nothing like a slightly confusing picture!
So for today I am watching 5977, 5992, 6015 and 6035 as resistance, 5920, 5900 and 5840 as the main support levels.
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