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UK FTSE 100 (.FTSE) posts worst week since 2008 financial crisis amid coronavirus concern

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UK FTSE 100 (.FTSE) posts worst week since 2008 financial crisis amid coronavirus concern

The UK’s leading index of companies has seen its sharpest weekly fall since the middle of the financial crisis as traders panicked over the spread of coronavirus. 

The bloodbath that has gripped markets for days continued,  as markets lost 3.2% on Friday, wiping more than £200 billion off shares on the FTSE 100 this week.

It includes a major drop on Friday, with the index losing 215.79 points to 6,580.61 as the blue chip index posted its worst week since October 2008, the depths of the financial crisis.

In terms of points lost, it is also the FTSE 100’s second worst week since the index was founded in 1984.

The worst losers in London were the airlines, with British Airways owner IAG and travel group Tui seeing a more than 8% drop in share price.

Neil Wilson, chief analyst at Markets.com, said savvy investors might be able to pick up good deals after this week.

“The selling has been indiscriminate and this signals broad panic, bonds driving equity markets and almost certainly plenty of companies that are down way more than they should be,” he said.

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 7,319.04.

The projected upper bound is: 6,795.09.

The projected lower bound is: 6,328.34.

The projected closing price is: 6,561.72.

Candlesticks

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 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 15.8269. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 7 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 18.77. 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 43 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 -192.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 18 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 8 period(s) ago.

Rex Takasugi – TD Profile

FTSE 100 INDEX closed down -215.790 at 6,580.610. Volume was 180% above average (trending) and Bollinger Bands were 182% wider than normal.

Open     High      Low     Close     Volume___
6,796.4006,796.4006,460.0806,580.6101,978,026,368
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 7,170.70 7,465.44 7,360.75
Volatility: 31 21 17
Volume: 967,825,920 675,588,544 725,565,952

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 10.6% 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 23 periods. Our momentum oscillator is currently indicating that .FTSE is currently in an oversold condition.

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