- Summary:
- The FTSE 100 index has been in a strong uptrend this month. It has risen by almost 15% this month because of earnings and Covid vaccine
The FTSE 100 is little changed in the futures market as traders continue on the Covid vaccine and the ongoing earning season. The index has risen in the past ten consecutive days and is at the highest level since August, 12. It has also gained almost 15% this month.
Corporate earnings
Yesterday, the FTSE 100 reacted to mixed earnings from Persimmon, Land Securities, and Meggitt. Like Taylor Wimpey, Persimmon reported strong results as the management hailed the strength of the UK property market.
Land Securities, also known as LandSec made a loss in the third-quarter but it showed some improvements. Meggitt, the leading supplier to plane manufacturers, announced disappointing earnings, with revenue and profitability falling.
Today, the FTSE will react to trading updates and interims from a number of companies. Flutter Entertainment, the gambling giant that owns Paddy Power, Betfair, FanDuel, and Fox Bet, will release its trading update. Analysts expect the results to show robust revenue growth in the third quarter. They will also be watching the guidance, with analysts expecting a loss of between £140-£160 million.
JD Weatherspoon is another FTSE 100 company that will release its results. Expectations for the company are low considering that UK pubs have been forced to close again to halt the spread of Covid-19.
Other top UK companies to watch out for today will be Coca-Cola, Great Portland Estates, and Workspace Group.
Covid vaccine lifts FTSE
The FTSE 100 is also rallying because of the potential for a Covid vaccine. On Monday, Pfizer announced that it had made strong progress on its vaccine. That means that the world could see a vaccine being administered in the next few months. Also, more companies that are developing their vaccines like AstraZeneca and Moderna could also release updates about their progress.
A vaccine will be an important thing for FTSE 100 constituents for several reasons. First, it will remove the necessity for more lockdowns. Second, it will reduce the risk of the UK economy contracting again. Third, it will help boost companies in the hospitality and aviation industry that have been hammered by the pandemic.
FTSE 100 technical analysis
Between June and November, the FTSE 100 index was in a slow downward trend that saw it form a descending channel as shown below. This month, however, the price has moved from below the channel and risen to the highest level since July 20. It has also moved above the 100-day and 50-day moving averages, which is evidence that bulls have taken over.
The Relative Strength Index (RSI) has also moved above the overbought level of 70. Still, it is not extremely overbought, which means that it could continue rising to the next resistance at £6,400. On the flip side, a move below £6,000 will invalidate this trend. This price is at the 100-day EMA and along the upper side of the previous channel.
FTSE index technical chart
