Trading FTSE 100 Index

Research Notes For 16 to 20 June > https://www.unum.capital/post/r1620june

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In summary, for the FTSE 100 Index (UK100), the current view is bullish across short, medium, and long-term timeframes. However, short-term traders should be cautious and look for pullbacks as buying opportunities.

Overall Trading Considerations:

Here's a breakdown of the current price action: The 7-day trend is indicated as "Strong," while the 14-day trend is "Very Bullish."

Comparison: Both the short-term (7-day) and slightly longer short-term (14-day) trends indicate upward momentum ("Strong" and "Very Bullish" respectively). This suggests a consistent buying pressure across these timeframes. The "Very Bullish" 14-day trend reinforces the "Strong" 7-day trend, indicating that the recent strength is part of a broader upward movement.

Potential Trading Approach:

Short Term (Approximately Next 1 to 10 Trading Days): The model notes, "Buyers In Control But Weakness On Lower Time Frame-Look For Pullback To 8 or 21-EMA (Buy Range) Before Next Move Higher."

• Approach: While buyers are in control, there's a note of potential short-term weakness. The recommended approach is to look for a pullback to the 8 or 21-period Exponential Moving Average (EMA) to enter a buying range before the next move higher. This suggests a "buy the dip" strategy within an overall bullish short-term trend.

Medium Term (Approximately Next 2 to 4 Weeks): The model indicates "Steady Upward Trend Possible Consolidation Around These Levels."

• Approach: The medium term suggests a continuation of a steady upward trend, with the possibility of some consolidation around current price levels. This implies a generally bullish outlook for the next few weeks, with potential for periods of sideways movement.

Long Term (Approximately Next 5 to 8 Weeks): The model states, "Has Resumed A Bull Move In A Strong Upward Trend."

• Approach: The long-term perspective indicates that the index has already re-established a strong upward trajectory. This suggests that the broader trend is firmly bullish, and the recent price action is a continuation of this significant upward move.

Overall Trading Considerations for the FTSE 100 Index (UK100):

• Consistent bullish momentum: Both short and slightly longer short-term trends are bullish, supporting upward price action.

• Short-term caution: Despite the buying pressure, the model advises looking for pullbacks as buying opportunities, rather than chasing the price.

• Medium-term steady upward trend: The medium term reinforces the bullish sentiment with a steady upward trend.

• Long-term resumption of bull move: The long term shows that the index is already in a strong upward trend, suggesting confidence in the continuation of the bull market.

The model points to a general upward trend for the price of the FTSE 100 Index (UK100).

Lester Davids

Senior Investment Analyst: Unum Capital