How high can FTSE 100 go this Friday?

Created 26/10/2017 at 21:44

FTSE for Friday (FTSE:UKX)

Since seeing a UFO above our office in Argyll a couple of months ago, literally every evening analysis work finishes with a wander outside to look at the sky. It's Scotland of course, rains a lot. And is cloudy even more, with a starry night something for the imagination.

The last month for the markets has proven equally uninspiring, with many movement triggers hit, but shares remaining wandering around aimlessly, like us staring at a cloudy sky while wanting again to see a star turn right.

Thankfully, the market feels like a change is coming due to the last few sessions giving more volatility than seen during October.

On the FTSE itself (not after-hours futures), the situation now is of movement above 7,520 pointing at coming growth toward 7,539 points initially. Secondary, if bettered, comes along at 7,561 points, rather effectively challenging the immediate downtrend since June this year.

If triggered, we'd be alarmed should the index slither below 7,487, as it would tend to challenge the logic for an upward surge.

In fact, if we're blunt, we'd prefer a wider stop below the red line on the chart, currently 7,450 points. Of course, this makes a heck of a wide stop and an unfavourable risk/reward scenario.

What happens if 7,450 breaks?

Initially, we'd anticipate weakness to 7,403 points with secondary, if broken, at 7,345 points. If triggered, the tightest stop looks like 7,586 points but, visually, we're less than convinced a drop is coming.

Have a good weekend.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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