UK FTSE 100 (.FTSE) steadies as U.S.-Iran fears ease; Brexit doubts hit midcaps

UK FTSE 100 (.FTSE) steadies as U.S.-Iran fears ease; Brexit doubts hit midcaps

UK FTSE 100 (.FTSE) steadies as U.S.-Iran fears ease; Brexit doubts hit midcaps

London’s main index recouped almost all its earlier losses on Wednesday as markets hoped flaring tensions between the United States and Iran would not escalate further, while midcaps slipped as worries of a hard Brexit resurfaced.

The FTSE 100 .FTSE ended roughly flat. The FTSE 250 .FTMC tumbled 0.8% as a steep fall in payment processing firm Finablr (FINF.L) also weighed.

Both benchmark indexes were initially jolted after Iran retaliated for the killing of one of its top commanders last week by launching missile strikes at U.S. forces in Iraq.

OANDA analyst Craig Erlam suggested markets may be viewing Iran’s move as a “more symbolic retaliation rather than one intended to harm, which reduces the case for the U.S. to respond with force.”

Tensions had threatened to boil over during the night but dealers turned sanguine as the day progressed. In the final few minutes of trading, U.S. President Donald Trump also signalled a desire to de-escalate the crisis with Iran.

Receding worries over the situation in the Middle East and a build in U.S. crude stockpiles led oil prices to session lows. Shell (RDSa.L) and BP (BP.L) were the biggest drags on the blue-chip index. [O/R]

The midcaps’ underperformance was down to comments from a European Central Bank policymaker that Britain could crash out of the European Union without a deal by the end of 2020.

While Prime Minister Boris Johnson’s victory in the Dec. 12 election had spurred hopes of a smooth Brexit process, his hard line on inking a free trade deal with the EU by December has investors concerned.

Blue-chip NMC Health (NMC.L) slumped 16% and Finablr slid 18% to a fresh low after a discounted share sale by major shareholders. Finablr’s unit Travelex separately confirmed it was hit by a software virus attack.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 7,440.01.

The projected upper bound is: 7,734.28.

The projected lower bound is: 7,425.60.

The projected closing price is: 7,579.94.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

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 45.1674. This is not an overbought or oversold reading. The last signal was a sell 6 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 59.72. 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 sell 6 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 -55. This is not a topping or bottoming area. The last signal was a sell 8 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 2 period(s) ago.

Rex Takasugi – TD Profile

FTSE 100 INDEX closed up 1.080 at 7,574.930. Volume was 17% below average (neutral) and Bollinger Bands were 68% wider than normal.

Open     High      Low     Close     Volume___
7,573.8507,579.4807,524.9607,574.930 606,222,144
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 7,598.10 7,391.11 7,348.93
Volatility: 9 13 14
Volume: 411,877,632 685,510,528 717,722,432

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 3.1% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect very strong flows of volume into .FTSE (bullish). Our trend forecasting oscillators are currently bullish on .FTSE and have had this outlook for the last 13 periods.

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