FTSE 100
The FTSE100 is trading lower this Thursday, as traders found an opportunity to take profits following a remarkable 10-day winning streak that allowed the index to regain its June 2020 highs. The index was also dragged down by falling shares of Rolls Royce, which had just completed a rights issue worth £2bn. Disappointment over the failure of AstraZeneca’s attempt to treat coronavirus patients with Calquence, its anti-cancer drug, also helped to weigh the index down despite a recovery in the UK GDP from -19.8% to 15.5%.
Despite the drop, overall sentiment on the FTSE remains upbeat, following the extension to the government’s furlough program. The FTSE is down just over 1% and currently trades at 6312.3.
The FTSE 100 index met resistance at 6405.3 yesterday, and sellers have driven prices down towards the 6325.3 support, where an intraday violation has occurred. A closing penetration below this support opens the door to the 6200.00 psychological support level.
A 50% retracement move from the low of 30 October comes in at the 5951.6 support level. This is also where the horizontal support intersects the upper border of the large descending channel; this reinforces this area as a strong resistance. Sellers would need to take out the 6200 psychological support as well as the 38.2% Fibonacci retracement at 6055.1 for this point to be attained.
On the flip side, a close above 6325.3 may allow buyers to initiate a move towards the 6405.3 resistance. 6514.8 (8/9 June highs) is an additional target to the north which become viable if 6405.3 gives way.
