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Spread Betting Opportunities

Monday 7 April, 2008

This edition of Spread Betting Opportunities assesses the outlook for the FTSE 100 index in the sessions ahead.

Short term outlook for the Footsie

The FTSE 100 ended the last week in bullish mode. The Footsie’s gain of 55.8 points on Friday culminated in a weekly gain of just over 254 points.

The chart of the FTSE 100 as at the close on Friday 4, April is presented below:

spread betting ftse 100 stocks

As things stand, the FTSE100 index looks extended from a technical perspective. Ordinarily, this would not in itself constitute a big cause for concern. But there are two things to consider. First is the fact that this price extension has come as the index approaches important price resistance around 6035. Second, as outlined in the analysis for the Dow, the outlook for US equity indices is of an impending short term pullback—and that would be expected to impact the UK market...

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From current level of 5947.1 (Friday's close), the index should move higher towards resistance at 6000-6035. However, the anticipated pullback should see the Footsie move lower to 5800 in the first instance, with a move to around 5700 likely thereafter. So long as support holds on any temporary pullback over the next few sessions, the next key upside target remains 6100.

Bottom line: As outlined in the last Update, the bigger picture favours a continuation of the overall bullish move. However, we do see potential for a pullback to immediate price support levels.

A move towards 6000 early in the week ahead may well present a profitable opportunity for a short term short position on the index.

Detailed analysis for the Dow, Cable and Crude Oil are also presented in the latest edition of the Market Timing Update. Make sure you check it out!

Key short term support levels to watch for: 5800; 5680–5700
Key short term resistance levels to watch for: 5990; 6034; 6105

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Please note that the analysis presented in ‘Spread betting Opportunities' is strictly for information and education only. It is not a recommendation to trade or invest in any financial security or trading instrument.

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