Trading the trend: short FTSE 100
The FTSE 100 not only underperformed other major stock indices in 2023 but has now also give a short-term technical sell signal.
We would thus like to short the FTSE 100 with a stop loss above the December peak at 7,770 and a downside target at 7,500.
(AI Video Summary)
Previous natural gas trade
In this week's "Trading the trend" feature, Axel Rudolph talks about his experience with a previous trade on natural gas. He had predicted that the price would go down, so they bet against it, but unfortunately, the price unexpectedly went up instead. This happened because of a cold spell in the US and northern Europe, which caused gas prices to rise. So, he ended up losing money on this trade. This taught him an important lesson about setting stop losses and accepting that sometimes mistakes happen.
This week's trade idea: short FTSE 100
Moving on to this week's new trade idea, he suggests betting against the FTSE 100, which is an index of the top 100 companies in the UK stock market. He's noticed that the FTSE 100 has been trading sideways since last August, meaning it hasn't really been going up or down. In fact, it's been performing worse than other stock market indices in Europe and the US. He doesn't think it's likely that the index will break through key resistance levels anytime soon, which means it probably won't go up much. He also sees a pattern called a bearish Harami, which is a sign that the price might go down. So, he suggests betting against the FTSE 100.
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