Investors have been cautious in early trading on the FTSE 100 Index this morning as a wait and see approach is generated.
The FTSE 100 Index has created mayhem for short term traders on the wrong side of their speculative wagers the past year. Technical charts have been blown to smithereens many times over as speculators have sought to find correlations within the UK equity compared to global indices. The FTSE 100 Index has underperformed badly compared to many major international equity markets and this is largely because investors do not like to deal with murky outlooks and they have in essence penalized the UK index with limited buying.
As boring as it might sound, investors are still trying to figure out the long term implications of Brexit as deals with the European Union are negotiated it seems into infinity. Maintaining a consistently positive outlook for the FTSE 100 Index has proven difficult and because of this the UK index has floundered when its competitors have done rather well.
Timing market entry strategy within equity indices is a dangerous game. However to be a profitable short term, wagering on CFD’s via the FTSE 100 Index can be an alluring occupation for those who enjoy risk taking. The UK index in many ways feels like it has not only underperformed, but that it may be due for a consistent surge upwards. Yet, going into this week Britain and the European Union continue to debate and make subtle economic threats to each other regarding future policy which does not help optimism.
If a speculator believes the FTSE 100 has the capability of generating upside momentum they cannot be faulted. Global risk sentiment has remained steady and any sudden positive news regarding the Brexit talks underway could spur a positive move. Support for the FTSE 100 looks adequate near the 5896.00 level short term and if bullish momentum can be found a test of the 5947.00 level up above seems like a rather close target.
Traders looking for positive correlations and a reason to take on buying risk may look to the US future markets this morning which are indicating there will be slight gains on the opening. However, for traders who do not trust the FTSE 100 and are looking to take advantage of what have become rather typical reversals downward, placing a sell limit order up above and looking for a test of support levels to develop again can be justified. Near term the FTSE 100 looks vulnerable and traders should use their risk management accordingly.
FTSE 100 Index Short Term Outlook:
Current Resistance: 5947.00
Current Support: 5896.00
High Target: 5968.00
Low Target: 5853.00