Risk On! FTSE 100 targets base breakout

After the G20 meeting last week, it appears that the US-China trade fight is entering a temporary pause (some say 90 days?). This sparks a massive rally across Asian equity markets today. On the rebound are European markets too.

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Now that the worst is – temporarily – over, will the current rebound lead to a sustained rally into 1Q 2019?

This depends on three  things. a) Corporate earnings, b) Crude/Interest rates, c) Tariff war. If all three are favourable, we may see the rally persists into the next year.

For the FTSE 100 Index, obviously it is building a base pattern. The index has reaffirmed the 6,800 level several times over the past few weeks. This suggests bargain buying at this level. But a break above 7,200 is needed lure more momentum purchases, and the completion of a base breakout.

 

The above references the authors opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds. Jackson’s expertise include global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research. Jackson has a PhD in Finance from Durham University.

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