FTSE mid term & the Covid effect
We've now been suffering from the Covid Effect on the markets for a little over 6 month.
A sudden drop in March saw losses become opportunities and we look to have found the the top of the first rally - although in Dec 01 & May 08 we saw a further extension on the 'initial' bounce - followed by further sustained losses.
With half year reports on the horizon, we will know the full impact to businesses soon - there will be a few that prospered from the opportunity - but most will begin reporting heavy drops in profits / major losses. Many will also see this as an opportunity to write off exceptional items, but for sure we'll be lucky to see any dividends until 2021 year end or later - further fuelling the drop.
Cloning the 'peak trend' line we created a near perfect 20 year channel.
If the recovery is swift we should breach the major resistance, but like with all major black swan events they can take years to develop fully and find the bottom.
Eliminating wicks, and if major support can't hold @£5,850 we set our target zone in the £4,400 - £4,800 range. (eliminating since this is a once in a lifetime opportunity - and we don't want to be front run and miss the boat).
Including the wicks - our Doomsday Line should hit between £3,750 & £3,900.
If £5850 is breached I'll be increasing my short positions and bargain hunting with profits once we fall below £5,000 for some long term dividend stocks.
Laddering in down to the Doomsday Line.
If the target zone is passed through I'll be looking to go 'full bull' with whatever solid companies still exist once we hit the target zone on the rebound. Profit taking doesn't start until we reach the major resistance - likely £7,000.
Caution - this isn't an overnight quick win strategy - and my plan may not be to the actual timescales - it could take years to play out, or it could be over by the end of 2021
Key areas:
- lose £5850 support this continues for years
- break above £6850 and we'll soon be wondering what all the fuss was about
Trade safe - and remember to prepare for moves in both directions - wait for the signals, and don't get caught in the chop.
Don't forget to thumbs up if you like the idea !
A sudden drop in March saw losses become opportunities and we look to have found the the top of the first rally - although in Dec 01 & May 08 we saw a further extension on the 'initial' bounce - followed by further sustained losses.
With half year reports on the horizon, we will know the full impact to businesses soon - there will be a few that prospered from the opportunity - but most will begin reporting heavy drops in profits / major losses. Many will also see this as an opportunity to write off exceptional items, but for sure we'll be lucky to see any dividends until 2021 year end or later - further fuelling the drop.
Cloning the 'peak trend' line we created a near perfect 20 year channel.
If the recovery is swift we should breach the major resistance, but like with all major black swan events they can take years to develop fully and find the bottom.
Eliminating wicks, and if major support can't hold @£5,850 we set our target zone in the £4,400 - £4,800 range. (eliminating since this is a once in a lifetime opportunity - and we don't want to be front run and miss the boat).
Including the wicks - our Doomsday Line should hit between £3,750 & £3,900.
If £5850 is breached I'll be increasing my short positions and bargain hunting with profits once we fall below £5,000 for some long term dividend stocks.
Laddering in down to the Doomsday Line.
If the target zone is passed through I'll be looking to go 'full bull' with whatever solid companies still exist once we hit the target zone on the rebound. Profit taking doesn't start until we reach the major resistance - likely £7,000.
Caution - this isn't an overnight quick win strategy - and my plan may not be to the actual timescales - it could take years to play out, or it could be over by the end of 2021
Key areas:
- lose £5850 support this continues for years
- break above £6850 and we'll soon be wondering what all the fuss was about
Trade safe - and remember to prepare for moves in both directions - wait for the signals, and don't get caught in the chop.
Don't forget to thumbs up if you like the idea !
Penafian
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