UK FTSE 100 (.FTSE) finishes higher on fresh stimulus hopes

UK FTSE 100 (.FTSE) finishes higher on fresh stimulus hopes

UK FTSE 100 (.FTSE) finishes higher on fresh stimulus hopes

UK stocks finished Wednesday’s trading session higher after a 50-basis-point interest rate cut by the US Federal Reserve raised hopes that governments around the globe would green light stimulus in a bid to mitigate the impact of the coronavirus.

Markets managed to cling onto their rebound, despite the IMF slashing its GDP forecasts after stating that ‘global growth in 2020 will dip below last year’s levels’. At 16.35, the benchmark FTSE 100 index closed up 97.39 points, or 1.45%, at 6,815.59.

LARGE AND MID CAP RISERS AND FALLERS

General insurer Legal & General lost 0.9% to trade at 262.8p, despite posting a 16% rise in underlying pre-tax profit, as coronavirus fears weigh on the insurance sector’s prospects.

Low-cost carrier Wizz Air rose 2.3% to £34.61 after it announced that it had cuts flights, particularly to Italy, and could slice capacity by 10% in the June quarter thanks to the disease outbreak.

Packaging company DS Smith gained 0.9% to 325.4p, having enjoyed growth in like-for-like corrugated box volumes in the second half of its financial year.

Infrastructure products supplier Hill & Smith advanced 4.9% to £14.43 as it reported a higher annual profit on the back of more US work, though growth was restrained by writedowns and restructuring costs at its Scandinavian operations.

Mining company Polymetal International firmed 2.8% to £13.02 after it posted a 36% rise in annual profit and hiked its dividend 71%, having benefited from higher gold and silver prices.

Follow miner Anglo American firmed 1.6p to £19.05, even after it reported a reduction in diamond sales pinned partly on the coronvirus cutting demand in key luxury goods markets likes China. Africa-focused fuel retailer Vivo Energy reversed 3.1% to 100.8p, having recorded a 3% rise in annual profit.

Vivo Energy also said it was continuing to review the status of its business in Morocco, where margins have been hurt by government-imposed fuel-price caps.

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 7,235.83.

The projected upper bound is: 7,042.59.

The projected lower bound is: 6,557.91.

The projected closing price is: 6,800.25.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white 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 42.4351. This is not an overbought or oversold reading. The last signal was a buy 1 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 33.70. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 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 -72. This is not a topping or bottoming area. The last signal was a buy 1 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 11 period(s) ago.

Rex Takasugi – TD Profile

FTSE 100 INDEX closed up 97.390 at 6,815.590. Volume was 53% above average (neutral) and Bollinger Bands were 231% wider than normal.

Open     High      Low     Close     Volume___
6,718.2006,856.2706,700.2306,815.5901,115,780,608
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 6,962.34 7,415.28 7,351.82
Volatility: 36 22 17
Volume: 1,204,434,432 708,581,632 734,548,032

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 7.3% 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 26 periods.

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