The FTSE is trading sideways lacking fundamental catalysts to drive the price action

After a couple of weeks full of professional engagements I am back with you to discuss the FTSE 100 and the way we should approach it over the next few sessions. At this time the London index is trading around the 6,150 points’ area and what we have been seeing over the past week or so is a broader sideways movement between the 6,050 and 6,200 points’ levels.

I believe that this kind of trading is strongly correlated to the recent US reports that shape Dollar’s and global markets’ outlook but also have to do with the economic and political uncertainty back here at home. After the recent NFP report investors’ focus fell on the Retail Sales figures that are closely monitored from stock traders as well but even though the consumer spending levels printed far stronger than expected this bullishness did not spill over to the global stock markets.

At the same time the Bank of England’s mixed outlook for the domestic economy is also playing a role in shaping the FTSE’s momentum while the potential of a Brexit still remains current. So given that the BoE appears having a mixed bias weighting the positive inflation expectations and the reduced growth results the FTSE remains hanging in the balance. To sum it all up, the fundamental drivers are mixed at this time hence the FTSE is trading in this sideways pattern and until we get a serious catalyst to drive the price action we should expect more of the same.

My approach is to look for intra-day opportunities in the London index and try to accumulate as much profit as I can while the index is trading between the 6,050 and 6,200 points’ levels. This means a lot of hands-on trades with tight limits and stops so if you prefer for smoother action then maybe you should lay back and allow the FTSE to build some momentum before entering the market again.

alpesh

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