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UK FTSE 100 (.FTSE) closes higher on stimulus hopes

UK FTSE 100 (.FTSE) closes higher on stimulus hopes

UK stocks had a volatile Monday after surging on central bank stimulus hopes, before plummeting on warnings over global growth and then rising again as the World Bank and International Monetary Fund pledged financing for countries hit hard by the coronavirus outbreak.

US markets surged after a quiet opening, with the S&P 500, Dow Jones and Nasdaq all up around 2.4% in mid-morning trading in the US. The UK’s benchmark FTSE 100 index closed 1.13% higher at 6,654.89.

LARGE AND MID CAP RISERS AND FALLERS

Insurance group Hiscox rose 4.1% to £12.76, despite reporting 61% drop in pre-tax profit as large catastrophe events including storms in the US, the Caribbean and Japan led to a surge in claims.

Hiscox also upped its premium revenue, generated strong investment returns and raised its annual dividend 3.5% to 29.6c per share.

Engineering group Senior jumped 4.2% to 147p, even as it booked a 53% fall in annual profit after it was hurt by the grounding of Boeing’s 737 MAX aircraft.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 7,284.48.

The projected upper bound is: 6,873.40.

The projected lower bound is: 6,400.95.

The projected closing price is: 6,637.17.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

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 15.9815. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 8 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 23.76. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 44 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 -141.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 19 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 9 period(s) ago.

Rex Takasugi – TD Profile

FTSE 100 INDEX closed up 74.280 at 6,654.890. Volume was 145% above average (neutral) and Bollinger Bands were 217% wider than normal.

Open     High      Low     Close     Volume___
6,580.6106,775.1806,496.0106,654.8901,756,766,336
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 7,092.87 7,447.73 7,357.47
Volatility: 33 21 17
Volume: 1,104,045,952 697,138,240 730,574,208

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 9.5% 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 24 periods. Our momentum oscillator is currently indicating that .FTSE is currently in an oversold condition.

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