Index Analysis: FTSE 100
With U.S. traders tucking into their Thanksgiving turkey, we’re going to shine a spotlight on UK stocks. We will run through the key levels to watch on the FTSE 100 and take a look at sector strength and weakness.
FTSE funnelled between VWAP’s
When analysing the FTSE’s price chart, the first and most important observation to make is its range-bound market structure. Clearly defined support and resistance zones have confined the FTSE's movement since summer.
Given the FTSE’s range bound structure, the very best trading opportunities will lie at the extremes of the range.
Recent price action has seen the FTSE climb higher from the bottom of the range, retesting the base of a wedge consolidation pattern that broke during October's sell-off.
With the FTSE now sat mid-range we can see that prices are effectively being funnelled between the Volume Weighted Average Price (VWAP) anchored to the September highs (representing the average position of FTSE bears), and the VWAP anchored to the October lows (reflecting the FTSE bulls’ average position). A resolution of this market squeeze should see a retest of the range extremes.
For detailed insights on trading in range-bound markets, check out Strategy Smarts: Playing the Range linked at the bottom of this page.
FTSE 100 Daily Candle Chart
Past performance is not a reliable indicator of future results
Sector Snapshot
At the sector level, we can see that the UK market is split between Tech strength and Energy weakness.
Given the FTSE’s weighting towards Energy and Materials, it goes some way to explain the underperformance of UK stocks relative to their U.S. and European counterparts.
Another key point of note is the strength in Utilities, a traditionally ‘risk off’ sector. This strength indicates the current lack of confidence in the market.
UK Sector Snapshot (7 Days)
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
https://www.tradingview.com/chart/EURUSD/px2Y9R86-Strategy-Smarts-Part-3-Playing-the-Range/
FTSE funnelled between VWAP’s
When analysing the FTSE’s price chart, the first and most important observation to make is its range-bound market structure. Clearly defined support and resistance zones have confined the FTSE's movement since summer.
Given the FTSE’s range bound structure, the very best trading opportunities will lie at the extremes of the range.
Recent price action has seen the FTSE climb higher from the bottom of the range, retesting the base of a wedge consolidation pattern that broke during October's sell-off.
With the FTSE now sat mid-range we can see that prices are effectively being funnelled between the Volume Weighted Average Price (VWAP) anchored to the September highs (representing the average position of FTSE bears), and the VWAP anchored to the October lows (reflecting the FTSE bulls’ average position). A resolution of this market squeeze should see a retest of the range extremes.
For detailed insights on trading in range-bound markets, check out Strategy Smarts: Playing the Range linked at the bottom of this page.
FTSE 100 Daily Candle Chart
Past performance is not a reliable indicator of future results
Sector Snapshot
At the sector level, we can see that the UK market is split between Tech strength and Energy weakness.
Given the FTSE’s weighting towards Energy and Materials, it goes some way to explain the underperformance of UK stocks relative to their U.S. and European counterparts.
Another key point of note is the strength in Utilities, a traditionally ‘risk off’ sector. This strength indicates the current lack of confidence in the market.
UK Sector Snapshot (7 Days)
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
https://www.tradingview.com/chart/EURUSD/px2Y9R86-Strategy-Smarts-Part-3-Playing-the-Range/
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