Equities Update: FTSE 100 – Bullish Outlook Unchanged

Feb 16, 5:30 pm
wall street_stock

FTSE 100 Near Record High

FTSE 100 managed to stabilise well above its former resistance area which stands at 7100 at the end of January, leading to another push higher all the way to 7300 during yesterday’s trading.

Looking at the chart, the index is also trading well above its 50 DMA, which keeps the bullish outlook unchanged, at least in the short term.

In the meantime, the Index eased back all the way to 7270 until this report is released. However, we believe that this is only a short-term retracement to the downside before the upside trend resumes.

Meanwhile, the downside retracement is likely to be limited, probably above 7200, which represents 50% Fibo of the recent rally.

On the upside view, a new record high is more likely in the coming days. This is as long as the index stays above the levels mentioned before. 7337 is likely to be the next stop, with a possibility to run towards 7400 in few weeks.

The Technical indicators are heavily overbought on most time frames, which keeps the possibility for another short term retracement, before the upside rally resumes.

Levels To Watch

S3

S2S1PivotR1R2R3
7231.287249.927276.167294.807321.047339.68

7365.92

DAX30 Holding Above 11700

After DAX30 breakout at the beginning of December of last year, rising from 10700 all the way to 11800, the index traded within a tight range but holding well above two key levels. The 50 DAY MA which stands at 11552 and 11500 support areas, which should be watched very carefully over the coming days.

Despite today’s declines, Dax managed to ease stabilize and eased some of the morning declines, trading around 11774 until this report is released.

However, the technical indicators are heavily overbought, which suggests a short-term decline before the bull run resumes. Such decline can be driven by a stronger Euro in the coming days, especially after the Euro retraced by more than 50% of its recent rally over the past few days.

In the meantime, the downside retracement is likely to be limited, and most likely to remain above the support levels mentioned above, where buyers are likely to appear. A break of the support areas would risk a deeper decline below 11000.

Otherwise, a break above 11800 would clear the way for further gains ahead, probably to 11860 with a possibility to test 12000 area.

Levels To Watch

S3

S2S1PivotR1R2R3
11607.5411666.4611730.2011789.1211852.8611911.78

11975.52

Nikkei 225 Ranging

Nikkei 225 have been trading within a tight range since the beginning of the year, between 19500 and 18800 with no clear break above or below those levels.

However, the index is struggling due to the notable choppiness of the Japanese Yen, which is mainly driven by the global uncertainty and the Bank of Japan gloomy outlook.

In the meantime, investors are likely to remain very cautious over the coming weeks. I would also prefer to wait and see a breakout of the current range to decide on the next move.

Yet, the technical indicators are heavily overbought, which suggests a short term retracement before the bull run resumes. However, such decline might also be limited above the lower band of the current tight range, where buyers are likely to appear again.

Otherwise, a deeper retracement would be more likely, probably to test 18500 psychological support, which should be watched very carefully, as a breakthrough that support would change the short-term outlook to bearish.

On the upside view, a break above the upper band of the current tight range would increase the possibility of another bull run above 19700 over the coming weeks.

Levels To Watch

S3

S2S1PivotR1R2R3
19331.1619375.5818406.7819451.2019482.4019526.8219558.02
 
Nour Eldeen Al-Hammoury

Nour Eldeen Al-Hammoury has more than ten years of experience in focusing on foreign exchange and global economic developments, as well as central bank policies and intermarket analysis (global markets relationships). Nour Eldeen is a regular on many major TV networks (several times each) such as: BBC Radio, BBC World News, Al-Jazeera, Al-Hurra TV CNBC Europe, CNBC Asia, CNBC Arabia, Al Arabiya, Bloomberg, Russia Today, Dubai TV, Sama Dubai, Skynews Arabia, Qatar TV and Future TV News.