Sep 14, 2020, 10:06:59 AM

FTSE 100: general analysis

Current trend

The leading index of the London Stock Exchange FTSE 100 demonstrates upward dynamics against the background of positive from the trade deal with Japan and is trading at 6060.0.

Yesterday, the UK government announced that London and Tokyo had entered into a free trade agreement, which will increase the turnover of goods by about 15.2 billion pounds. This agreement marks the first full deal for the UK as an independent trading country since the Brexit agreement came into effect. Also, the instrument is supported by the positive after the publication of Friday's macroeconomic data, according to which the volume of manufacturing production for July rose to 6.3% against the background of the projected growth of 5.0%.

Among the growth leaders among the components were Rio Tinto (+5.14%), Aviva (+5.02%), Burberry (+3.59%), and Melrose Industries (+3.10%). There are few companies showing downtrend dynamics, among them Schroders (–1.46%) and JD Sports Fashion (–1.50%) stand out.

Support and resistance

The index continues to trade within the downwards local channel and approaches the resistance line. The Alligator indicator continues to be in a global sell state, and the AO oscillator histogram is kept in the negative zone, although upward bars are forming.

Resistance levels: 6160.0, 6516.0.

Support levels: 5970.0, 5760.0.

Trading tips

After reaching the channel resistance line and decline or consolidation below the local support at 5970.0, sell positions with the target at 5760.0 will be relevant. Stop loss is 6100.0, above the local support.

After growth or consolidation above the local channel resistance at 6160.0, buy positions with the target at 6516.0 and stop loss 6000.0, below the resistance level, will be relevant.

Implementation period: 7 days or more.