April has left us with very bad news in India related to the pandemic and some hope for the future in developed countries due to the increasing shares of vaccination among the population. In May, we will have some information about the GDP in day 12 from the Office for National Statistics. Later, on day 18 we will have Claimant Count Change, and the next day the data for Consumer Price Index (CPI).
In regards to the stock market, in our FTSE 100 Analysis for April, we talked about a trade with an objective at 7000.
At this moment, the index has stopped close to that around 7040, which was reached on April 16 and 19. That means the resistance worked as forecasted, and the price experienced a small correction that took it to around 6860 on April 20 and 21.
So according to our plan, now we should happily have the trade sold and be enjoying the 2.7 percent profit.
Now, the price could extend the bullish movement a little more, but we are in the resistance area, and it is not smart to make any trade. If it breaks the resistance, we could think about it; but if you ask us, our prediction is that there will be a correction soon. This correction can be through a price with falls or through time with a sideways movement.
If the correction occurs, we have an important support at 6860. If the price breaks it, then the falling could be serious. However, we cannot ignore that now the price is in an uptrend, and we do not see any reason to make a short trade either.
Our May Forecast:
We have to recognise that our forecast for may is a little blurred at this time. On one hand, it seems that the price has the strength to continue rising, but the area is also an important resistance. We think we could have some rises, but likely sooner than later we will experience the correction we have talked above. Thus, for us it is not a time to trade, but to wait and see how everything advances.
If you have shares from the FTSE 100 you would not need a medallion guarantee when selling them.
*This post was written when the FTSE 100 was at 6.969,81 on April 30, 2021.