Technical Analysis GB100 : 2018-06-27

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IFCMarkets Technical Analysis
IFCMarkets Technical Analysis

Expansion in UK industrial sector slowed in April. Will the GB1000 continue declining?

Recent UK economic data were negative on balance after the first quarter GDP slowed to 0.1% over quarter from 0.4% in Q4 2017. While retail sales rose more than expected in May, trade deficit widened in April, manufacturing and industrial production expansion compared with the same period a year ago slowed when acceleration was expected. Weaker economic data are bearish for GB100.

GB100

On the daily timeframe the GB100: D1 is below the 50-day moving average MA(50) which has leveled off.

  • The Parabolic indicator gives a sell signal.
  • The Donchian channel indicates no trend yet: it is flat.
  • The MACD indicator gives a bearish signal: it is below the signal line and the gap is widening.
  • The Stochastic oscillator has not breached into the oversold zone yet.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 7491.17. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian channel at 7791.88. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (7791.88) without reaching the order (7491.17), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

Position Sell
Sell stop Below 7491.17
Stop loss Above 7791.88

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