November 23, 2020 Update: The FTSE 100 Index has recovered sharply after holding onto the 61.8% retracement of its rally earlier this year at 5,515. It broke above its key downtrend and its 200-day average for the first time since February.
Credit Suisse analysts said with positive news on Brexit growing, they expect the recovery in the FTSE 100 Index to extend. They the next resistance level at 6,342, which was the high at the end of June, and then at the key upper end resistance of the entire range that has been intact since May at 6,512 and 6,537.
Credit Suisse analysts see support at 6,095, and they expect it to hold to keep the immediate risk higher. Although the U.K. trend is still down versus the MSCI World, there are some signs that the downtrend is stalling.
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FTSE 100 could form a bull wedge continuation pattern
October 23, 2020 Update: The FTSE 100 is still in a downtrend channel, and Credit Suisse analysts say only a move above 6,112 and 6,124 would make a more sustained uptrend more likely. Completion of a medium-term bull wedge continuation pattern would also help. That pattern would suggest a test of the 200-day moving average at 6,253. Credit Suisse analysts see stronger resistance at 6,512 and 6,537.
They see support at the 50% retracement of the March to June uptrend at 5,705. The next support would then be at the May low of 5,661. If the FTSE 100 falls below that level, the next support could be at the 61.8% retracement at 5,515.
FTSE 100 Index may be forming a top
September 24, 2020 Update: Credit Suisse analysts say the FTSE 100 Index appears to be building a top, and they expect renewed underperformance. If the index falls below 5778 and 5765, it would confirm that the recovery from March is over. They see support at the 50% retracement of the March to June up move at 5705 and the May low of 5661.
Below that level, they see 5515 as possible at the 61.8% Fibonacci retracement. If that level breaks too, then they believe the entire March to June uptrend could be fully retraced. Only if the index rises above 6089 or 6124 do they think it’s likely that the index will shift into a sideways range.
“The UK remains in a relentless downtrend relative to Global Developed Equities, which remains our base case, and we look for the trend to extend freshly lower,” Credit Suisse analysts wrote in a recent report.
FTSE 100 Index falls below 6,000 on Jackson Hole speech
August 27, 2020 Update: The FTSE 100 Index fell back below 6,000 today following Federal Reserve Chairman Jerome Powell’s speech at Jackson Hole. European stock indices didn’t pay much attention to Powell’s speech, which signaled easier monetary policy in the near future.
Powell’s new policy is based on average inflation targeting, and his announcement was as expected. U.S. stocks surged after his speech despite weak economic data that revealed first-time jobless claims remained above 1 million.
Meanwhile, the FTSE 100 remained lackluster, initially flipping into the green after the Fed chairman’s Jackson Hole speech but then moving back into the red before the market closed for the day.
FTSE 100 Index: What is it and how can you invest?
Whenever we read or talk about international stock markets, the name ‘footsie’ or FTSE 100 index (INDEXFTSE:UKX) pops up again and again. It’s an index is managed by the Financial Times Stock Exchange (FTSE) Group, which is a subsidiary of the London Stock Exchange Group. The FTSE 100 index was created in January 1984 with a base value of 1,000 points. As of April 24, the index is at 5808.08, meaning its constituents have grown nearly six times in valuation.
What is ‘footsie’?
The ‘footsie’ is one of the largest and most popular stock indices in Europe. It consists of 100 of the largest companies by market capitalization listed on the London Stock Exchange (LSE). It’s a market-cap weighted index. So, companies with a higher free float market capitalization have a greater weightage in the index.
The index represents about 80% of the total market cap of the London Stock Exchange, which is one of the world’s largest stock exchanges. It includes large companies based in the UK as well as many others headquartered outside the country.
Many see the FTSE 100 index as a barometer of the UK’s economic health. But it’s not a reliable indicator because it also comprises many international stocks. A more accurate barometer would be the FTSE 250 index because it has only a small number of international stocks.
The index value is calculated in real time and is published every 15 seconds. The FTSE Group adds or removes constituents in the index once every quarter depending on their market capitalization, liquidity, and other factors. The readjustments typically take place on the Wednesday following the first Friday in March, June, September, and December.
How to invest in the FTSE 100 index?
Investors can gain exposure to the FTSE 100 index and its constituents easily through exchange-traded funds (ETFs). However, there aren’t any FTSE 100 ETFs trading on American stock exchanges. Some footsie constituents have their American Depository Receipts (ADRs) listed on the US exchanges, which you can buy.
Some of the largest FTSE 100 ETFs are the iShares Core FTSE 100 UCITS ETF, Vanguard FTSE 100 UCITS ETF, DBX FTSE 100, and HSBC FTSE 100 ETF.
Other FTSE indices
Besides the FTSE 100, some of the FTSE Group’s other popular indices are the FTSE 250 and FTSE 350. The FTSE 250 consists of the next 250 largest companies listed on London Stock Exchange after the FTSE 100. The FTSE 350 index consists of 350 largest companies on LSE, combining the FTSE 100 and FTSE 250.