Interactive Investor

Watch this FTSE 100 chart very closely

20th April 2018 10:01

Alistair Strang from Trends and Targets

FTSE FOR FRIDAY (FTSE:UKX) & BRENT CRUDE again

Before launching a breathless monologue about Fridays potentials, it's probably best to mention oil. Last time we discussed Brent, we suggested in the Oil Index needed better than 8,940 to be taken seriously.

The catchily named Oil Producers index (NMX0530) closed the session at 9,032 points. This means, from our perspective, Brent crude is regarded as heading toward $81 next. Secondary, if bettered, remains at $89.93 where some sort of stumble is very, very, probable. The price of the product requires below $60 to cancel optimism. Or Boris to say something silly...

As for Friday and the FTSE 100, there's little doubt the price of oil shares has helped boost the FTSE. There now appears little doubt future movement on the index bettering 7,341 points should provoke travel to an initial, and fairly useful, 7,495 points.

Somehow, we rather suspect it unlikely the market shall produce a 150-point firework on a Friday. It's a bit of a pity as Fridays used to be packed with optimism - back when dinosaurs stalked Westminster, rather than grubby politicians.

Strange to say, if there's going to be a very near-term initial target, it calculates at 7,395 points. To spoil the immediate acceleration potential, the index needs below 7,255, so there's the safest stop loss level.

Please remember, we are 'only' discussing the FTSE, not FTSE Futures.

What happens if 7,255 breaks?

In such an instance, it appears reversal to a useless 7,243 makes sense. Secondary, if broken, comes in at 7,212 points. If triggered, a pretty tight stop around 7,293 looks wise as there are more arguments looking upward than downward.

And that's it. This week has not stunk, despite a fairly miserable Monday! Have a good weekend, even though there is no Formula 1.

Source: interactive investor                  Past performance is not a guide to future performance

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.

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