FTSE 100 looks for more gains as DAX and S&P 500 keep struggling

​FTSE 100 outshines its peers

After an indecisive session for the futures yesterday thanks to early weakness in Europe and then a recovery in US markets, the FTSE 100 is moving higher in early trading.

Last Friday saw a weak end to the month of April, as recession and inflation fears once again came to the fore. Despite the expectation that the Federal Reserve (Fed) and Bank of England (BoE) will increase rates this week, markets have begun the month on the front foot.

Additional gains target 7580, the highs from the second half of last week, while beyond this the highs of February and April around 7690 come into view.

Stronger commodity prices continue to provide the support for the index that others are lacking, and the absence of richly-valued tech names remains a powerful boon for the index in these changed times.

DAX pinned below 50-day SMA

This index also struggled yesterday, being unable to establish a firm direction. However, it has pushed higher overall from last week’s lows at 13,600, even if the price remains stuck below the 50-day simple moving average (SMA), currently 14,114.

Fears about the impact a ban on Russian energy imports will have continue to hang over European markets.

A more bullish case requires a move back above the 50-day SMA, in order to open the path to the recent peak at 14,500, last seen in late April. This needs breaching to the upside if the price is to break the run of lower highs that has dominated since the beginning of the year.

Alternately, a fresh bearish move needs to break back below the lows of last week at 13,600, something that would hand the advantage to the sellers and bring the March lows back into view as a potential destination.

S&P 500 hovers nears March lows

Rebounds in this index continue to melt away, something seen last week when the bounce of Wednesday and Thursday turned into a fresh slump on Friday.

This continued into the new week and the new month, with the index returning to the March lows at 4120 and even moving below it, to its lowest level in a year.

However, the 4120 level continues to hold for the time being, providing hope that a bounce can still materialise. If it does, the 50-day SMA and then the 4400 area come into view, followed up by the 200-day SMA (currently 4496).

Further declines below 4060, yesterday’s low, would put the 4034 and then 4000 levels into play.

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