The FTSE 100 is looking for direction as we draw near to the Fed meeting on Wednesday

The FTSE 100 spent most of the last week range-trading around the 6,400 points as volatility remained low and there were no significant developments to spark investors’ interest. The price action we saw at the beginning of the week seemed to propel the index higher but after Tuesday any momentum died down and we were left with the FTSE trading sideways.

Over the next 5 days I would expect more price action on the London benchmark index but I would think that volatility will pick up on Wednesday. This is because the FTSE has assumed a waiting stance at this time and with no important news to provide any friction until Wednesday’s Fed meeting it is likely to see this sideways pattern holding on until then.

I believe that the exit from this formation will show us the way, I notice that the momentum has been turning to the downside and if that reverses the FTSE’s previous uptrend then we should see the index making its way towards the 6,200 points’ area. On the other hand, any breakouts towards higher levels are clearing the way for the 6,550 points’ area.

As far as preferred tactics go, I would advise you to treat the current situation on the FTSE as any other breakout opportunity. Just look for the index to break out of its current range, set your targets with a stop protecting you for any sudden reversals and get out as soon as you get your desired profit. The FTSE 100 lacks any general direction at this time so any momentum following tactics would not be useful.

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alpeshAlpesh Patel uses Sharescope Pro for his investment analysis

 

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