FTSE 100 Daily Analysis 28th Oct 2009

The FTSE 100(UKX) is still showing resilience at the 5170 level as the buyers come back in with force. The market gapped up initially on Tuesday and managed to close with a 9 points gain.

The main catalyst for the rise was due to a rally from heavyweight energy issues led by BP after its forecast-beating third-quarter results, which offset weakness in banks and mining stocks.

Drugmakers were also in demand ahead of third-quarter numbers from the sector as Glaxosmithkline is due to report on Wednesday.

The FTSE 100(UKX) is still showing resilience at the 5170 level as the buyers come back in with force. The market gapped up initially on Tuesday and managed to close with a 9 points gain.

The main catalyst for the rise was due to a rally from heavyweight energy issues led by BP after its forecast-beating third-quarter results, which offset weakness in banks and mining stocks.

Drugmakers were also in demand ahead of third-quarter numbers from the sector as Glaxosmithkline is due to report on Wednesday.

Banks were the biggest drag on the blue-chip index,as investors were unsettled by mounting fears that RBS and Lloyds Banking Group could be ordered into disposals by the European Commission after Dutch peer ING announced that it would split into two.

Technical Outlook for Wednesdays trading session

The FTSE 100(UKX) is still showing signs of strength whilst all the other indices around the world are wilting. The FSTE 100(UKX) didn't put in a lower low yesterday and held the double bottom at 5190, although it did put in a lower high just below the 200 moving average which is still bearish. The FTSE retraced just over 50% of yesterdays high to low, this indicates a bear flag and further weakness amy be on the horizon.

The double bottom at 5190 will need to be watched carefully........

Support Levels;
5192, 5170

Resistance Levels;
5200, 5210, 5235, 5245, 5256