Technical analysis for FTSE 100 for 19th February 2024
UK shares advanced on Friday, driven by gains in miners and banks, with the indexes posting weekly gains as investors remained optimistic about potential interest rate cuts from the Bank of England after recent economic data. The FTSE 100 ended up 1.5%, logging its biggest daily gain in four months. The mid-cap FTSE 250 added 0.5%. Both indexes snapped a two-week losing streak, with the blue-chip FTSE 100 gaining nearly 2% on the week.
UK retail sales surged by a stronger-than-expected 3.4% in January, data showed on Friday, yet it did little to dampen market optimism.
Asian shares struggled to make much ground on Monday as fading chances for early rate cuts globally soured the mood and Chinese markets returned from holiday with only muted gains. A holiday for U.S. markets also made for thin trading, while the latest surge in tech stocks is set to be tested by results from AI diva Nvidia on Wednesday.
Chinese stocks saw modest gains as onshore traders returned from the Lunar New Year holidays, with broader caution toward the market offsetting buoyant travel and spending data. The benchmark CSI 300 Index climbed 0.5% as of 10:56 a.m. local time on Monday, belying expectations of a bullish open after the Feb. 9-16 break. A gauge of stocks in Hong Kong had rallied nearly 5% in three sessions since it reopened on Wednesday while the Nasdaq Golden Dragon China Index jumped 4.3% last week.
FTSE 100 technical analysis for today, 19th February 2024
The US markets are closed today for Presidents Day and as such we may well see a fairly lacklustre performance on the FTSE100. That said, the 7720 got a reaction on Friday, albeit a slightly muted affair, but that remains a key resistance for the moment. Above this then the R1 level at 7740 is next up and a test of that today looks likely.
That also aligns with the top of the Raff 10 day channel so we may see any early push to this area falter here, and then a drop back down to test the daily pivot support at the 7678 level. That would also mimic the ASX200 pattern. Just below that daily pivot then we also have the Hull MA at 7655 so I would like to see this level hold if it were to be tested.
That said, initially the bulls will be keen to defend the 7700 round number and with it not being broken really over the weekend I expect they may well manage that, hence thinking an initial rise today.
Above 7740 then the 7800 level would come into play as we have the top of the 20d Raff here, and it is also just above the R2 level at 7784. With bullish 2hr charts for both the Dax40 and FTSE100 currently then a rise and a bull Monday would fit the charts well.
Support wise, below the 7650 level then a slide to the 7620 area would be the next main support but with the US closed the markets are more likely to drift about rather than being too volatile. 7616 is the key fib and we also the the 30m 200ema at 7625, as well as the daily 25ema at 7615. As the daily chart has now gone bullish that would be the first test of that key EMA so I would expect it to hold - though probably not going to be tested today, it may well get a reaction later this week. Maybe even tomorrow if a bear Tuesday kicks in!
Not too much more to say really, I expect that we may well just bounce around a little bit in a. fairly tight range - 7740 and 7690 maybe - with an outside chance of 7655.
Good luck today.
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