. FTSE 100 Drops on Banking, Luxury Stock Slump

FTSE 100 Drops on Banking, Luxury Stock Slump.

15 Jan 2024

UK’s FTSE 100 falls on selloff on banking, luxury shares.

FUNDAMENTAL OVERVIEW:

On Monday, the FTSE 100, the UK’s primary benchmark, relinquished its early gains, experiencing a decline driven by a sell-off in luxury and bank stocks. Additionally, subdued corporate earnings projections had a dampening effect on FTSE 250 shares.

Investors are anticipating the release of British consumer price inflation data and retail sales figures for December later this week. These key indicators are expected to provide more insight into the possibility of interest rate cuts.

The Bank of England appears to be more hawkish compared to the Federal Reserve and the European Central Bank, maintaining a stance favoring a prolonged period of higher interest rates.

On the other side of the Atlantic, investors will keep a close eye on the business activity data for January and the retail sales figures for December in the U.S.

PageGroup’s shares (PAGE.L) experienced a 2.5% decline following the global recruiter’s adjustment of its annual profit forecast.

In the meantime, an industry survey revealed that the average asking prices for homes in Britain have seen the most robust beginning to the year since 2020. The data suggests a potential easing of the slowdown in the sector, driven by increased demand in January.

FTSE 100 TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

FSTE 100 is currently trading within a down channel.

FTSE 100 is positioned below all the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Selling zone, while the Stochastic oscillator suggests a Negative trend.

Immediate Resistance level: 7670.4

Immediate support level: 7615.2

HOW TO TRADE FTSE 100

After a significant upward movement, the FTSE 100 underwent a reversal, initiating a decline. Currently, it has breached the previous day’s low and is approaching a crucial support zone. A break below this zone could potentially lead to further downside.

TRADE SUGGESTION- STOP SELL– 7600.9, TAKE PROFIT AT- 7512.5, SL AT- 7663.2.