FTSE All-Share Index (.FTAS) Market Round-Up

Last week, the benchmark FTSE All-Share Index (.FTAS) started on a sharp bullish note and made a high of 3866.29 on February 16, 2021. However, till the end of the week, most of its earlier gains were erased and it settled at 3769.95 with the marginal weekly gain of ~0.40 percent for the week ending February 19, 2021. The recent week started on a slightly bearish tone, but prices are still sustaining above the major support level 3609. On the weekly chart, RSI (14-period) is trading at ~55 levels and seems supportive of upside movement. Prices are well placed above 21-period and 50-period SMA, providing strength to the index. 

Market sentiments impacted negatively after the release of retail sales data. As per the data published by the UK Office for National Statistics on February 19, 2021, the retail sales volumes in January 2021 decreased by 8.2% compared to December 2020 due to nationwide coronavirus (COVID-19) restrictions. However, an announcement by PM Boris Johnson on February 22, 2021, about the government’s four-step roadmap to ease lockdown restrictions across the England limited losses in the index.

Global Markets Wrap-Up

Wall Street witnessed profit booking from the higher levels last week and both benchmark indices closed in the red. S&P 500 settled at 3906.71 with an overall loss of ~0.71 percent while NASDAQ Composite Index settled at 13,874.46 with an overall loss of ~1.57 percent for the week ending February 19, 2021.

Last week, the employment data released by the Labor Department of the US impacted the market adversely. As per the data published for the US claims for jobless benefits, the number increased by 13,000 to 861,000 compared to 848,000 in the prior week.

Having understood the US market performance over the past one week, taking cues from major global news, and based on our technical analysis of the FTSE All-Share Index (.FTAS) for the upcoming week, now let us have a look at the two FTSE listed stock picks from the technical standpoint. Noted below are our recommendations based on generic insights, entry price, target prices, and stop-loss for Hyve Group PLC (LON: HYVE) and Hollywood Bowl Group PLC (LON: BOWL) for the next 2-4 weeks duration:

Hyve Group PLC

HYVE Group PLC (LON: HYVE), formerly known as ITE Group, is an FTSE-listed media company headquartered in London, United Kingdom. The company is in the advertising sector majorly deals in the event business. HYVE Group designs and hosts various events across Europe, Asia, and South Africa. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

HYVE’s prices broke the major resistance level of GBX 132.80 on February 16, 2021, and thereafter trading above the breakout level. The stock has recently started to move upside after the consolidation of more than 2 months and for the short term (2-4 weeks) we can expect the continuity of an upside momentum in it. The next important resistance level appears at GBX 185 and prices may test that level in the coming sessions.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~48 levels and indicating the start of a new upside trend in the stock. The weekly volumes showing an increasing trend and seem supportive of an upside movement. The CMP is above the 21-period and 50-period SMA with a positive crossover, providing strength to the prices.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for Hyve Group PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Hyve Group PLC is looking technically well-placed on the chart and we have a ‘Speculative Buy’ rating on the stock. Investment decision should be made depending on an investors’ appetite on upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of our recommendation is as follows:

Hollywood Bowl Group PLC

Hollywood Bowl Group PLC (LON: BOWL) is the largest bowling entertainment operator in the United Kingdom. The company runs multi-lane ten-pin bowling under the brands namely AMF Bowling & Hollywood Bowl. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

BOWL’s prices broke the major resistance level of GBX 215 on February 19, 2021, and thereafter trading above the breakout level. The stock recently started to move upside movement after the consolidation of 3 months and for the short term (2-4 weeks) we can expect the continuity of an upside momentum in it. The next important resistance level appears at GBX 294 and prices may test that level in the coming sessions. Any further breakout above the GBX 294 may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~59 levels and indicating a positive trend in the stock. The weekly volumes also seem supportive of the upside movement. The CMP is above the 21-period and 50-period SMA, further providing strength to the prices.

Financial Summary: 

Summary of the Key Financial Metrics for the past four years for Hollywood Bowl Group PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Hollywood Bowl Group PLC is looking technically well-placed on the chart and we have a ‘Speculative Buy’ rating on the stock. Investment decision should be made depending on an investors’ appetite on upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of our recommendation is as follows:

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and generally include an update on employment, inflation, GDP, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact the FTSE All-Share Index and listed stocks’ prices.

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00), however, returns are generated within 2-4 weeks’ time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risk, currency risks, and social and political instability risks etc.

Entry Price: For the given recommendation(s), Entry Price is assumed be at or above a certain level. However, a slight deviation on either side in the ‘Entry Price’ can be considered depending upon the potential expected or indicated.

Note: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50- period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

A trailing stop-loss is a modification of stop-loss in case of favourable movement in the price to protect the gains. We suggest Investors to Trail the Stop-Loss as per the aforementioned levels if the stock price achieves more than 50% of the Target 1. Investors should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1.

Risk Reward Ratio: Risk reward ratio is the difference between an entry point to a stop loss and profit level. We suggest ~60% Stop Loss of the Target 1 from the entry point.

The reference date for all price data, volumes, technical indicators, support, and resistance levels is February 22, 2021.

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

GBP: British pound sterling

GBX: British pence sterling

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

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