Travelling Technicals with Global Indices: FTSE 100

One of the many feats that was brought into this world by the British Empire was the Industrial Revolution that became formative in the one of the elements in the circular flow of economic activity namely production that improvised on the handcrafted form of manufacturing goods and services and stepped it up to mechanisation. 

You could argue that the need to raise capital to fund these new inventions that sped up the production line could have directly attributed to the prominence of stock exchanges around the world as we know them today. The relevance of this clearly puts a considerable amount of focus on the London Stock Exchange whose existence came about in 1801 which still features some prominent manufacturing companies in the world with an example of such; 

• Anglo American 
• SABMiller 
• BP (Formerly British Petroleum) 
• GlaxoSmithKline 
• Diageo 
• Rio Tinto 
• Rolls-Royce Holdings 
• Smith & Nephew
• Vodafone Group
• Standard Chartered 
• Tesco

All these companies have strong links to former colonies providing an integral part of keeping British industrial heritage alive in today's standing.  

Having charted a series of global equity indices over the past five months, I've found the analysis of the technicals to be indicative of the situation encompassing the country's economy with the FTSE 100 being no exception after facing a barrage of doubt over whether the British public will elect to remain or leave the European Union that contributes significantly to its economy. 

Let's get down to those charts: 

Quarterly

The most glaring characteristic that stands out for me on this chart is the 15 years of zero real returns that's left investors dissatisfied. The range between 6800 and 3600 are the points where aggressive buying and selling takes place as is seen from the three occasions stiff resistance has prevented the index from surpassing the highs. 

Otherwise we could say the ease with which the index bounces off or down is fairly consistent in its pathway except over the last three years where the price has failed not once but a few times at the top of the range which admittedly is concerning. 

The previous three times the price candles attempted the break, long tails were left behind indicating high volatility. 

Highlighted in the blue line is polarity which is going to play a crucial role in the weeks ahead in deciphering whether the index will remain stuck in a directionless volatility storm or if the next leg down might is imminent.  

Monthly

We head over to the monthly and the volatility we saw exhibited on the quarterly is shown again with a technical formation of a megaphone that's been in place for sometime. The shape has generated the volatility that it threatened to unveil however the level of 6000 remains strong support. 

The Brexit risk still remains the biggest event that could be the catalyst to see this index dropping lower but we'll need to see the lows of February 2016 being taken out first before we can speculate on how much further it could fall. 

Obviously an exit would be devastating to the British economy but it seems as though the polls might just be able to pull in the direction of a stay. That however still leaves us with possibilities over the direction after that. I suppose we could direct our thoughts towards the overall weakness of equities and align our ideas in that sense.