Support 7003, 6980, 6935, 6900 Resistance 7024, 7069, 7100, 7115

Good morning. It felt a bit odd going long when the price dipped down yesterday as we are at such high level but it came good, though very close to the stop! The bears started off the proceedings with the drop from 7040, but the bulls defended well, and it still remains positive for the moment. The bottom of the 10 day Bianca has support at 7003 today, a level that could well hold again (will we see a bull Tuesday today? Been a bit sparse recently!). In his first formal talks with Germany since taking office, Greek Prime Minister Alexis Tsipras put on a show of solidarity with counterpart Angela Merkel, promising to “avoid division and find a common solution” with his European partners during talks last night. In other news overnight, a Chinese manufacturing gauge fell to an 11-month low in March, suggesting more stimulus may be needed to bolster factories in the world’s second-largest economy.

US & Asia Overnight from Bloomberg
(Bloomberg) — Most Asian stocks fell, following a drop in U.S. equities, as industrial companies declined and investors awaited manufacturing data from China.

About three shares dropped for every two that rose on the MSCI Asia Pacific Index, which traded little changed at 148.77 as of 9:03 a.m. in Tokyo. The measure closed yesterday at its highest since Sept. 4, and traded at 15 times estimated earnings, the highest multiple in almost five years. Preliminary manufacturing data due today in the region may be mixed, with a private report from China expected to show growth is slowing and a purchasing managers’ index from Japan likely to signal accelerating expansion.

“Markets are a little bit uncertain on where to turn next as equity valuations are starting to look stretched,” Tony Farnham, an analyst in Sydney at Patersons Securities Ltd., said by phone. “Commodity shares will struggle to find support if China’s manufacturing numbers disappoint.”

Japan’s Topix index slid 0.3 percent. South Korea’s Kospi index sank 0.2 percent. New Zealand’s NZX 50 Index fell 0.2 percent. Australia’s S&P/ASX 200 Index gained 0.3 percent. Markets in China and Hong Kong have yet to open.

Chinese equities were cut to neutral from overweight by strategists at Bank of America Corp.’s Merrill Lynch led by Ajay Kapur, who said the weakening property market and intensifying anti-corruption campaign will crimp consumer spending. The Shanghai Composite Index advanced 2 percent Monday, gaining for a ninth day to cap the longest winning streak since April 2007.

Macau slashed its monthly gambling revenue forecast 27 percent, as Chief Executive Fernando Chui pledged a five-year plan to make the world’s largest gaming hub less dependent on casinos.

U.S. Markets
E-mini futures on the Standard & Poor’s 500 Index were little changed. The U.S. equity benchmark index lost 0.2 percent Monday, and the Nasdaq Composite Index retreated from a 15-year high.

Global stock values climbed by more than $2.4 trillion last week as Fed policy makers signaled a more gradual pace of monetary tightening than previously estimated. San Francisco Fed President John Williams speaks to economists in Sydney on Tuesday after Stanley Fischer, the U.S. central bank’s vice chairman, said there won’t be a “smooth upward path” for rates, even with the first increase potentially warranted by late 2015. [Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 7024 so as we are just below that then its initial resistance. Looking at the moving averages on the 30minute chart I think weight see an initial drop today, down to support at 7003 where we have the 10 day Bianca channel, but more likely the 200ema at 6978 (if hit around midday). Below this level the next support is 6950 (10ema on daily) then 6900/6915 area where there are a few supports, including the 25ema on the daily (should be good support, 6900). Resistance wise, yesterdays high was 7047 so anything above that will likely try and reach 7070 (top of 20 day Bianca) and then the 7100, where we have the top of the 20 day Raff. Slightly higher is the top of the 10 day Bianca at 7115. I’d be more inclined to try the short at 7100 though.

So, if we get a bull Tuesday then I think we will get a dip and rise, and I think the bulls will be keen to defend the 200ema on the 30min if we dip that low, 6980. I still feel its going to push up a little bit higher towards 7100 before dropping to test the 25ema on the daily. If it drops back today then that 6900 level is worth a long.

53 Comments

  4. Put a long on Dax yesterday evening. Saw it was 50 points down at 8, looked at 9 and it was 50 points up. Bonus profit.

    1. My thoughts are FTSE down, but when? With an election about to start and clearly impossible to call, I expect a fall and then sideways trading around the 6750 area. With the £ falling in recent days overseas investors have been buying up UK stocks. This has pushed the FTSE over 7000. However that money will return home very soon as the election starts. So this week I would assume FTSE will bounce around 7000 but within a couple of weeks 6750 and then anyone’s guess. I certainly would not be looking long till after May 7 th

  7. As long as 7000 holds then the next ‘technical’ target of the current cup and handle pattern is 7120. Probably not today but could be tomorrow. No idea when or where this current trend is going to end. My guess at the moment is somewhere in the 7120-7250 zone, but could of course be sooner. Looking for consolidation over lunch time and more up this afternoon if the typical one-direction Tuesday pattern plays out.

      1. Took half profit on a long from 7015 at 7060. Letting the other half run to 6780. Stop is at break-even, so won’t be a losing trade either way. Should get at least one more push up today – we’ll see if it makes a higher high or not. I’m not long for 7120 – but won’t be surprised if it gets there. 7015 is now below the rising trend line, so if I do get stopped it shows that the up momentum is slowing.

  8. Carrying on from yesterdays post, @Nick yeh I am seeing how this day trading stuff goes for a couple of months. If it works for me I’d consider the Australia one, but would make sense to make it cheaper for loyal users who want to use both 😉

    I’m still putting in my swing positions on various charts across the globe and finding that more profitable, but greed makes me day trade too 😉

  12. FTSE fallen 25 points in a hour. German plane crashed in France. Dow sold off yesterday evening because it was over brought and they still advocate long???

    1. As long as that massive 8-9am hourly engulfing candle does its job I can’t see a reason to be short, but agree it’s like squeezing the last juice out of the FTSE lemon. End of this week and next is when we may get some seasonal weakness. Until then the trend is your friend.

  13. Returned to the Fray………..Spent an amusing time dodging Ladyboys in Pattaya and now back to the business of earning Cash

        1. Yes bottom of Soi 7 on Beach opposite Lovely Corner Bar……I pick up their wifi signal and use Capital Spreads App from there

    1. I have a good Friend from New Zealand “Mad Dog Belarus” who writes articles on Gold Performance which you can view on Thaivisa……..Its a rampant Long from where he sits.
      I follow him avidly….

      1. What’s he saying at the moment? Gold rising normally indicates falling Dollar and equity pull back.

  15. I know I am on short, so I could be biased, but it all looks like a big sell off any minute. All charts indicating sell.

  16. Ravi, what other instruments do you swing trade? I am looking at swing trading due to lack of time to day trade.

  18. FTSE’s just bounced off the exact parallel channel with the two highs at 57 and 65 and the lows at 7010 and 35. Let’s see if it holds or breaks. I know I’m long biased but it could be forming a base to break higher. Also the S&P has been alternating up and down the last few days. Yesterday was a down so today might be an up?

  19. For the rising trend line to stay intact we should see a close above 7050 today. This line may be due to crack soon though, as by Thursday’s opening it will be at 7095 and Friday’s at 7125. There’s lots of divergence forming on the RSI suggesting this run is perhaps starting to run out of steam.

    1. Up-trend is well and truly challenged by the sell off into the close. Failure to hold 7050 suggests a trend change may be underway. Need to start seeing daily closes below 7000 (5 day ema) to confirm this.

  20. Dow subdued so far today, but growth fundamentals are intact. Expect push back to ≈ 18200. FTSE has held well around 7050 — looking for further modest upswing.

    1. Jim. Dow yesterday evening was well over brought and that’s why it shed 80 points in a short period of time. It still is and 18200 is a pipe dream. Closer to 18000 by 8pm. Then its just downhill to 17500 in the next few days.

  21. Senu, it worked for Dow again (arrows). He needs to start studying that market. But on other hand I would be worried if he did.

Comments are closed.