Technicals suggest the FTSE100 index still has upside momentum
Mining giant BHP Billiton (BHP) rallied on Tuesday after mining giant BHP Group (BHP) released its latest results for the year ended June 30, 2022, showing that overall earnings rose 26% to $21.3 billion, while dividend payments also hit an all-time high. Shares in London rose 4 percent to 2,326 pence. Affected by this, the FTSE100 index returned to the level in mid-June this year.
The energy sector also edged higher as Brent crude rebounded today. In addition, some information about company acquisitions is also worth paying attention to. Among them, American brand management company ABG is expected to buy British fashion brand Ted Baker at a price of 210 million pounds, 110 pence per share; while American private company Thoma Bravo is considering an offer for British online start-up Company Darktrace.
Ted Baker(TED) shares rose 17% to 109p and Darktrace (DARK) shares rose 21% to 502p.
In general, the positive news from the stock market, the weakness of GBP/USD and the good economic data (UK employment and wage growth) all provided support for the upside of the UK equities today.
FTSE100Index Daily Chart
Chart source: TradingView
FTSE100The index hit a fresh two-month high on volume in early trade, with further gains still possible. The K-line closed with a long lower shadow on Monday, showing the strength of the bulls. The uptrend has remained intact since late June, with the moving averages running upwards, and the FTSE100 may have a bullish target between 7,634 and 7,688.
IGCustomer Sentiment Index: FTSE100 Index
FTSE100Index: According to IG client sentiment data, 22.44% of traders are net long, and the ratio of traders’ shorts to longs is 3.46:1. The number of net long traders increased by 9.19% from yesterday and decreased by 9.44% from last week; while the number of net short traders decreased by 2.13% from yesterday and increased by 5.48% from last week.
In general, crowd sentiment is often used as a contrarian indicator, and the current net short position means that the FTSE100 index may rise. The number of net short traders decreased from yesterday, but increased from last week. Combined with current and recent sentiment changes, the FTSE100 index tends to wait and see in the short term.
(Written by Nick Cawley, translated by Chris Li)
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