UK services and construction activity accelerated in April. UK economic data were mostly weak lately. The inflation slowed in March as did the GDP growth in the first quarter. However while the UK manufacturing sector expansion slowed in April the activity in the construction sector rebounded in April. The purchasing managers' index for the construction industry rose to 52.5 in April, up from 47.0 in March, a 20-month low. A reading above 50 indicates expansion. And the services sector accelerated expansion in April, though not as much as expected: Markit’s service PMI rose to 52.8 from 51.7 in March. Expansion of activities in construction and services sectors is bullish for FTSE100.
On the daily chart FTSE100: D is retracing after hitting 15-month low in the end of March.
The Donchian channel indicates uptrend: it is tilted higher.
The MACD indicator is above the signal line with the gap widening. This is a bullish signal.
I believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 7571.3. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed below the lower Donchian boundary at 7337.1. After placing the pending order the stop loss is to be moved every day to the next fractal low. Thus, we are changing the probable profit/loss ratio to the break-even point. If the price meets the stop-loss level (7337.1) without reaching the order (7571.3) I recommend canceling the order: the market sustains internal changes which were not taken into account.
Technical Analysis Summary
Position Buy
Sell Stop Above 7571.3
Stop loss Below 7337.1
On the daily chart FTSE100: D is retracing after hitting 15-month low in the end of March.
The Donchian channel indicates uptrend: it is tilted higher.
The MACD indicator is above the signal line with the gap widening. This is a bullish signal.
I believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 7571.3. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed below the lower Donchian boundary at 7337.1. After placing the pending order the stop loss is to be moved every day to the next fractal low. Thus, we are changing the probable profit/loss ratio to the break-even point. If the price meets the stop-loss level (7337.1) without reaching the order (7571.3) I recommend canceling the order: the market sustains internal changes which were not taken into account.
Technical Analysis Summary
Position Buy
Sell Stop Above 7571.3
Stop loss Below 7337.1