Home Headline News Amid Brexit deal hopes, UK Plc outshines UK FTSE 100 (.FTSE)

Amid Brexit deal hopes, UK Plc outshines UK FTSE 100 (.FTSE)

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Amid Brexit deal hopes, UK Plc outshines UK FTSE 100 (.FTSE)

Hopes that Britain will seal a Brexit deal saw unloved London-listed companies with exposure to the domestic economy rise more than blue-chip stocks on Friday, for the first time since May, in a major reversal of fortunes.

JP Morgan’s UK domestic plays index that tracks about 30 UK stocks that make all or most of their revenue at home .JPDEUKDM soared almost 8% on Friday for its best day since the grouping was created nearly three years ago.

The index outperformed the FTSE 100 .FTSE by 4.4%, the only time since May that it has performed better.

The gains were driven by a rally in housebuilders, Persimmon (PSN.L), Barrett (BDEV.L) and Taylor Wimpey (TW.L), domestic banks Lloyds Bank (LLOY.L) and Royal Bank of Scotland (RBS.L) and retailers, such as Kingfisher (KGF.L) which owns DIY chain B&Q.

Investors appetite for UK focussed assets surged after British Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar said on Thursday they saw “a pathway to a possible deal” ahead of the Oct. 31 Brexit deadline.

Sterling hit a three-week high late on Thursday, although the currency had a rollercoaster ride on Friday after comments from European Council President Donald Tusk tempered some of the optimism over talks. [GBP/]

Shares in London-listed companies that rely on the British economy have suffered since the June 2016 referendum on European Union membership.

Since May the index has languished at a big discount to the FTSE-100 as worries have grown that the country will crash out of the bloc following the resignation of PM Theresa May.

The markdown widened following the appointment of staunch Brexiteer Johnson as prime minister.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 7,291.29.

The projected upper bound is: 7,445.65.

The projected lower bound is: 7,035.00.

The projected closing price is: 7,240.32.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 79.8398. This is not an overbought or oversold reading. The last signal was a buy 4 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 49.64. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 46 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -22. This is not a topping or bottoming area. The last signal was a buy 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 7 period(s) ago.

Rex Takasugi – TD Profile

FTSE 100 INDEX closed up 60.720 at 7,247.080. Volume was 109% above average (neutral) and Bollinger Bands were 10% wider than normal.

Open     High      Low     Close     Volume___
7,186.3607,250.0907,144.6607,247.0801,507,688,704
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 7,206.51 7,241.28 7,252.96
Volatility: 23 18 15
Volume: 739,503,552 756,135,552 713,946,944

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FTSE 100 INDEX is currently 0.1% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .FTSE at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .FTSE and have had this outlook for the last 4 periods.

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S. Jack Heffernan Ph.D. Economist at Knightsbridge holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Crypto, Mining, Shipping, Technology and Financial Services.