UK FTSE 100 (.FTSE) drops 1.85% to 7,024 points wiping £102billion off share prices in the last two days
Stock markets across Europe including in London fell for the second day in a row today as fears continued over the economic impact of coronavirus.
The FTSE 100 index of leading UK companies had fallen 132 points or 1.85 per cent to 7,024 by late afternoon, after opening up by 0.5 per cent in early trading.
This represented a drop of £40billion, one day after it accounted for £62billion of losses on global markets yesterday on what was its worst day since 2015.
Europe’s markets also fell, as Frankfurt’s DAX 30 index lost 0.3 per cent to 12,992 and the CAC 40 in Paris dropped 0.5 per cent to 7,157 – despite both also opening up.
It comes after stock prices London lost 3.3 per cent yesterday over coronavirus fears, while Frankfurt and Madrid fell by 4 per cent and Paris shed 3.9 per cent.
News that the virus is claiming lives far beyond China had sparked a rout on trading floors globally, with the Dow on Wall Street suffering its worst day in two years.
The coronavirus death toll climbed to seven in Italy yesterday and several Middle East countries were dealing with their first infections.
This has fed worries the virus could turn into a pandemic, with China’s death toll already standing at 2,705.
More than 80,000 people have been infected in China since the outbreak began, apparently in an illegal wildlife market in the central city of Wuhan late last year.
However the World Health Organization has said the epidemic in China peaked between January 23 and February 2 and has been declining since.
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 7,419.36.
The projected upper bound is: 7,222.88.
The projected lower bound is: 6,802.66.
The projected closing price is: 7,012.77.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
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 28 white candles and 22 black candles for a net of 6 white candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 10.9252. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 27.53. 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 40 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 -286.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 15 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 5 period(s) ago.
Rex Takasugi – TD Profile
FTSE 100 INDEX closed down -138.950 at 7,017.880. Volume was 42% above average (neutral) and Bollinger Bands were 40% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 7,368.31 7,505.01 7,368.65
Volatility: 23 18 15
Volume: 751,642,176 672,845,120 716,016,640
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.
FTSE 100 INDEX is currently 4.8% 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 20 periods. Our momentum oscillator is currently indicating that .FTSE is currently in an oversold condition.