FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
The FTSE dropped to a six-week low as a sharp fall for miners erased gains earlier in the day. The blue-chip index fell 1.2pc, or 83.46 points, to close at 6,994. The bulls failed to break above the 7100 level, with the drop starting just below, after the quadruple witching had seen. rise to 7094
Mining giants Rio Tinto and BHP were the biggest drag on the FTSE 100 Friday after iron ore sank below $100 a tonne. Shares in both companies dropped around 4.5pc amid expectations that the fall in prices will weigh on profits.
FTSE 100 live outlook prediction analysis for 20th September 2021
Well Friday got a bit bearish! The bears are now knocking on the door of 6900 and a test of the 6890 support level where we have the daily 200ema and also the bottom of the 10d Raff channel for today. We may well see a bit of a reaction as this level, and it could also tie in with a test of the 4375 S2 level on the S&P. Which incidentally is also the bottom of the 10 day Raff channel on that as well. That said, the ASX200 sold off steadily today all the way down to S3 which subsequently held, with a weak Asian session.
As mentioned previously I have been expecting the drop off the test of the 25ema on the daily, and we finally got that on Friday with a test of the 7100 area. That moving average has dropped now to 7075 so that would be the area that the bulls need to push above to get any bullishness again. For the moment it’s bearish and shorting the rallies is the main play. If the S&P starts to defend though then we may start to rise again. Below that 4375 level then S3 is at 4333…..
The FTSE 2 hour chart is, unsurprisingly, bearish after Friday and has resistance at the 7020/7030 area for today. Seems a big ask to get that high today but if it did then that area may well see further bears appear. The news flow remains pretty negative again (how quickly it changes) with gas shortage, supply issues and so, though bear in mind that September is more often than not a bearish month and seasonally sees declines. Second week of October may well see the worm turn and bulls reappear for a year end rise.
Below 6890 then the bears will be looking to take this down to S2 at 6840 and as that is well outside the bottom of the Raff channels (and could coincide with the 4375 S&P level) we may well see this hold, at least initially. Below this then 6747 is S3 but I dont think we will be seeing that today.
The bulls, as mentioned, will need to break above 7070 really, but I cant see it getting that high today. Any bullishness may well fizzle out at the 7000 level, especially as 6990 held as support for so long, so that becomes key resistance.
So possible rise and dip to play out today as the “buy the dip” mob appear. Works for as long as it doesn’t of course, or until the bulls recapture the key levels – 6990 and 7070 really. Watching the 6890 as key to start with this morning, with 6840 below that. Good luck today.
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