Tight range still, 6810, 6840. 6775 support area

Good morning. Well the bears didn’t really get going off that previous resistance area of 6832 on Friday and the short ended up being stopped at breakeven. That said, it hasn’t really pushed on from that sort of level just yet, so I think we may see a bit of a  dip before further rises. It certainly looks and feels like it wants to reach that all time high again around 6950, and possibly even that 7100 area now looking at the weekly chart (though as mentioned on Friday, when everyone seems bullish, be cautious!). Maybe that’s a bit too optimistic but you never know! Last night saw news from China that their economy grew 7.7% in Q4, exceeding estimates, though the reaction on the FTSE futures has been muted. Overall, based on the FTSE action last week we are in a pretty narrow range to start the week, with support at 6810 and resistance at 6840.

Asia Overnight from Bloomberg

Asian stocks fell after China’s economic growth slowed in the fourth quarter as gains in factory output and investment spending eased.

The MSCI Asia Pacific Index dropped 0.3 percent to 139.18 as of 3:08 p.m. in Tokyo, with eight of the gauge’s 10 industry groups falling. The measure finished last week within 2 points of its closing level for 2013 as investors weighed signs of a stronger global economy against concern about equity valuations.

“We’ve not had a fantastic start this year,” Vasu Menon, vice-president for wealth management research at Oversea-Chinese Banking Corp. in Singapore, told Bloomberg TV. “Asia is facing economic headwinds. China is trying to engineer an economic slowdown to ensure more sustainable economic growth. We’re likely to see more volatility in the coming weeks as the U.S. earnings season gains pace.”

Bianca Trends for FTSE
Bianca Trends for FTSE

China GDP

China’s economy expanded 7.7 percent in the fourth quarter from a year earlier, the National Bureau of Statistics said today. That compares with 7.8 percent growth in the previous three months.

Industrial production rose 9.7 percent in December from a year earlier, data showed, down from a 10 percent gain in November. Retail sales last month rose 13.6 percent from a year earlier, slowing from 13.7 percent in November.

Fixed-asset investment in China excluding rural households increased 19.6 percent in the January-to-December period from a year earlier, when it expanded 20.6 percent.

S&P Futures

Futures on the Standard & Poor’s 500 Index were little changed. The measure slid 0.4 percent on Jan. 17 as earnings at companies from General Electric Co. to Intel Corp. disappointed investors. U.S. equity markets are closed for a holiday today.

“Until we see a clear upside catalyst emerge in the near-term, we may see this lack of enthusiasm persist for some time,” Tim Radford, a strategist at Rivkin Securities in Sydney, wrote in an e-mail.

FTSE Outlook

FTSE 100 prediction for today
FTSE 100 prediction for today

Looking at the daily chart below, we still have the ProTrend resistance line in play at 6840, which hasn’t broken since the first touch on 16th Jan. As such I do think we might see a dip back to the bottom of the 10 day Raff channel area at 6770ish in the short term, before further rises. That also tallies with the 10 day Bianca channel which has the bottom at 6775. As mentioned above though, we are in quite a tight range between 6810 and 6840 at the moment, and one or both of those levels is likely to break today.

The US market is closed today which will likely make the FTSE muted too.

Basically today is looking at support at 6810 and resistance at 6840 once again. If those levels break look to trade short or long targeting 6792, or 6860.

49 Comments

  4. Short @ 6831 looking for a 10-15 point ride down where I can get in on a long ready for tomorrow. Range bound today.

  6. Nick, are you expecting some big movement next week after the federal reserves meeting?
    (Anyone elses opinion also welcomed!)

  8. US market closed so FTSE range bound. Dont worry about your long Senu – if you hold till tomorrow you will see 6730+ in my view. I would be surprised if we dip below 6710 today.

    1. Placed an order to buy at 6810 this morning. FTSE dropped to 6810.3, I missed a good long oppertunity by .3 pips! 🙂

  12. yeah just hang in their senu…low volume trading is often like that..looking to short @6833 again gl

  13. On the FTSE 4hr cash chart I have a divengence of momentum with price, so I reckon we have to test the zone below 6800 before too long.

  16. I am slightly surprised that stocks esp miners have not sold off after the waker than expected Chinese data released last night.

    2. Miners generally looking to have bottomed out. They have a long way to go to get back to 2011 levels. E.g., see AAL.

  20. Another very dull day – 2014 been rubbish so far. Market just hasnt got going. Maybe tomorrow in the lead into next weeks Fed meeting? Glad my shares are doing very well as FTSE not offering anything major – but it will just need to be patient

    1. I too thought to do the same. But how do you think the volume will be after hours with dow taking a day off.
      Are you planning to hold overnite ?

      1. think I will short the top of this broadening top, right now at 6850, it+s also the top of this up middle channel

  28. Like watching paint dry when the us is closed shows how much we do rely on them to keep things moving …

  29. SHorting 6840 at this level is too risky. WIth a close so high and adding the spread. Only at 6850 is worth the risk for tomorrow

  30. Agree pms with hind sight I would not be shorting it now is only one way this is going and that’s up. Will hopefully scalp a couple of points before going long tomorrow ready for Dow open.

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