FTSE 100 gears up for crack at record
10th February 2017 09:26
by Alistair Strang from Trends and Targets
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Written: Thursday, 9th February 2017 - 23:03
FTSE for Friday (FTSE:UKX)
Our effort last week certainly merited a prized "smug gits" award and, hopefully, we can replicate the success on the 10th February.
The immediate situation now suggests movement on the market above 7,230 should provoke an initial 7,259 points, which is believable.
The secondary calculates at 7,313 points, though hoping for an 83-point day against a backdrop of February only showing a range of just over 200 points (so far) may be naive.
If the movement triggers, stop needs to be pretty wide as 7,165 or below breaks the immediate uptrend for February. In fact, even below the 7,200 level would bother us as it would signal a retreat below the 'blue' downtrend for 2017 - not a good thing.
On a broader note, we've been fairly heartened at some shares breaking their triggers for substantial upward travel, but remain concerned at the banking sector's lethargy.
Essentially, it appears the banks remain capable of spoiling any optimism for the year, a familiar sentiment.
AO World (LSE:AO.)
This lot flagged up as potentially being interesting for an ISA. It transpired we'd written about them two months ago for another reason (Here's the link), but, unsurprisingly, the share is still valid as a bit of a risky punt.
The thing is, the opportunity is there, just not triggered yet. Perhaps some research into fundamental information may not be wasted time.
To get the misery out of the way first, from a Big Picture perspective, it's stuffed. Until such time as share price betters 'blue', it's trading in a region with 93p as the potential "we issued bad news" bottom. Secondary calculates at a "must bounce" 10p.
However, there can be little doubt 'blue' is seen as pretty important to the nice folk who decide price direction, and currently this price level is at 176.509p or so.
Apparently, if the trend continues, in 81 days the share faces a "show and tell" movement, a point where it either must break trend and give hope for the future, or face a further decline toward 130p and a challenge against the 'red' uptrend since 2015.
To be honest, we shall not be surprised should this happen, hopefully prior to a miracle upward surge as the price would visually challenge the prior lows of 2016. Coupling this event with a long-term uptrend gives plenty of reason to hope for a recoil.
To slip on the teacher hat, there's a pretty visible glass ceiling apparent at 200p or so, and we've little doubt should this price manage to better the innocent pink line, some reasonable rises can be hoped for. In this event, our growth tier of 202 / 230 / 270p remains utterly unchanged.
In summary, like everything associated with the market, it's risky, but perhaps worth a glance for the brave. Next week, we'll look at some so-called blue chips. (no such thing!)
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.