FTSE 100: trading volatility has decreased significantly
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | BUY STOP |
| Entry Point | 8330.0 |
| Take Profit | 8480.0 |
| Stop Loss | 8250.0 |
| Key Levels | 8030.0, 8220.0, 8330.0, 8480.0 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 8220.0 |
| Take Profit | 8030.0 |
| Stop Loss | 8280.0 |
| Key Levels | 8030.0, 8220.0, 8330.0, 8480.0 |
Current trend
London's leading FTSE 100 index is trading at 8286.0, showing sideways dynamics associated with a new correction in the bond market.
The stock market is positively influenced by the situation in the national economy. The Bank of England's Financial Policy Report showed signs of easing lending conditions over the past month, which is supportive for businesses going forward. UK households and corporate borrowers have adjusted to high interest rates, the banking system is showing stability, and inflation, down to 2.2%, which is very close to the 2.0% target, is allowing financial institutions to provide more favorable lending terms.
Keeping the interest rate at 5.00% had a positive impact on the yield of leading bonds, which in turn is a negative signal for the stock market. The 10-year bonds yield rose to 4.029% from 3.762% in mid-September, the 20-year bonds yield rose to 4.523% from 4.272%, and the 30-year bonds yield rose to 4.595% from 4.513%.
The growth leaders in the index are Prudential Plc. ( 4.16%), Coca Cola HBC AG ( 3.34%), Standard Chartered Plc. ( 2.08%), BAE Systems Plc. ( 1.96%).
Among the leaders of the decline are JD Sports Fashion Plc. (–6.12%), EasyJet Plc. (–3.51%), Severn Trent Plc. (–3.01%).
Support and resistance
On the daily chart, FTSE 100 quotes are approaching the resistance line of the descending channel with boundaries of 8400.0–8000.0.
Technical indicators are in a state of uncertainty: the fluctuation range of the Alligator EMAs has narrowed almost completely, and the AO histogram is forming new correction bars, being below the transition level.
Support levels: 8220.0, 8030.0.
Resistance levels: 8330.0, 8480.0.
Trading tips
If the index continues growing, and the price consolidates above the resistance at 8330.0, long positions with a target of 8480.0 and stop-loss of 8250.0 will be relevant. Implementation time: 7 days and more.
If the asset reverses and continues declining, and the price consolidates below 8220.0, short positions can be opened with the target at 8030.0. Stop-loss — 8280.0.
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