The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
FTSE 100 recovering
The recovery off 7400 continues, although those of bearish disposition will note that we are about to hit a downtrend line, which intersects with the rallies of last week, running down off the all-time high from the beginning of June. A failure to push above 7533 would be bearish, but we have seen this shallow descending trendline formation all too often this year, across a variety of indices. They have all ended with fresh breakouts to the upside, so bearish positions should be handled carefully. A drop from 7533 could suggest a return to the 7400 support zone, while above 7550 we are back on course to 7600.
A word on seasonality as the FTSE is now in the summer period when gains usually prove hard to sustain. The average performance over the past 20 years suggests a late-June rally tends to falter in early July, before a steady drift lower into September.