Summary:
- UK100 within 100 points of record peak
- Index has rallied over 12% in 7 weeks
- Oil majors some of the biggest risers
The rally in the FTSE over the past 7 weeks has been pretty incredible with the benchmark enjoying a strong, clean move higher to trade within striking distance of its all-time high. The gains in excess of 12% over the period have been all the more impressive considering the lack of any real pullback. There have been just 8 red candles out of the 33 closed ones since the market made a low of 6847 back in March!
The UK100 has enjoyed a strong rally lately and is back near it’s all-time high of 7791. Source: xStation
Despite the sell-in-May trading adage the UK100 has actually performed fairly well during this month over the past decade, with June the worst performing month. This could be something to keep a look out for going forward as any reversal signals around this potentially key level could provide attractive shorting opportunities. The rise seen in the market has been supported by a steady decline in the pound as the BoE performed a U-turn on a May rate hike, but should sterling recover going forward then this is a potential threat to the rally.
Another source of the upside in the UK100 has been the rise in Oil, which has boosted Oil majors BP and Royal Dutch Shell to multi-year highs. These firms have received a double boost, with both the rising oil price and the falling pound providing upside to their stock price. BP has moved above the 5.70 mark after breaking prior resistance around 5.30 and has gained nearly 100 ticks (20%+) in the past couple of months. The highs seen in the late 2000s around 6.57 could now be set for a retest, especially if the price of crude continues to rise.
BP has enjoyed a dual boost of a rising oil price and a fall in GBP and its gains have boosted the broader UK100. Source: xStation