FTSE 100 News and Analysis
As discussed in yesterday’s analysisFTSE, DAX and other global indices have recently experienced a strong recovery from the lows of March as the return of risk-on-sent sentiment boosted demand for equities.
After a decline of around 13.3% in the UK 100 index from the February high, a setback of the 6,800 handle allowed bulls to push prices back above the 7,000 mark before falling into a wall of resistance at the key psychological level of 7,500.
Despite increased volatility and unprecedented geopolitical background, the strong rise in British equities allowed the FTSE to recover about 10.8% of those losses, driving prices back to levels last tested before the invasion of Ukraine.
After five consecutive days of profits, the formation of a hang man cherry on the daily time frame (a bullish reversal pattern occurring after a strong upward trend and is an indication of a pause in the upward trend) price action forced back into a confluent zone, just below the 7,500 level mentioned above.
FTSE 100 Daily Chart
Graph prepared by Tammy Da Costa using TradingView
From a shorter-term perspective, the four-hour chart highlights the indecisive price action as shallow bodies remain in a well-defined range.
Meanwhile, the MACD (Moving Average Convergence / Divergence) crossed the zero line, a potential indication that upward pressure may continue to decline in the short term.
FTSE 100 Four o’clockCheart
Graph prepared by Tammy Da Costa using TradingView
FTSE levels to watch:
Support:
- S1: 7425 (20 days MA)
- S2: 7281 (50 days MA)
- S3: 7000 (key psychological level)
Resistance:
- R1: 7500
- R2: 7687 (High February)
- R3: 7800
FTSE 100 Market Sentiment
FTSE 100: At the time of writing, retail trader data shows 39.40% of traders are net long with the ratio of traders short to long at 1.54 to 1. The number of traders net-long is 14.86% higher than yesterday and 22.21% lower from last week, while the number of traders net-short is 11.62% lower than yesterday and 32.54% higher than last week.
We usually take a contradictory view of crowd sentiment, and the fact that traders are just short indicates that FTSE 100 prices may continue to rise.
Positioning is less just-short than yesterday, but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed FTSE 100 trading bias.
— Written by Tammy Da Costa, Analyst for techlives.in
Contact and follow Tammy on Twitter: @ Tams707
