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

Last week, the benchmark FTSE All-Share Index (.FTAS) started on a negative note but thereafter witnessed a decent buying. It made a high of 3708.13 on December 04, 2020 and settled at 3702.27 with an overall weekly gain of 3.02 percent for the week ending December 04, 2020. Prices also broke the major resistance level of 3660 on December 03, 2020, and now hovering around the psychological level of 3700. The current week started on a sluggish tone; however, prices are still sustaining at higher levels. On the weekly chart, RSI is trading at ~61 levels and the CMP is above the 21-period and 50-period SMA, further providing strength to the prices. Now the immediate resistance level appears to be at 3820 and prices may test that level in the coming sessions.         

Global Markets Wrap-Up

Wall Street continued its upside rally last week as well and both the broad indices S&P 500 and Dow Jones Industrial Average made a new life-time high. S&P 500 settled at 3699.12 with an overall weekly gain of ~1.67 percent while Dow Jones Industrial Average settled at 30218.26 with an overall weekly gain of ~1.03 percent for the week ending December 04, 2020. The current week started on a flat note and prices are sustaining at the higher levels. The US market rallied on the hope of COVID-19 vaccine approval as the US Food and Drug Administration (FDA)'s vaccine advisory committee will meet on December 10, 2020, to discuss Emergency Use Authorization (EUA) of the Pfizer (NYSE: PFE)-BioNTech (NASDAQ: BNTX) vaccine. In addition, the data reported by the US Bureau of Labor Statistics on December 04, 2020, the total nonfarm payroll employment rose by 245,000 in November, while the unemployment rate stepped down to 6.7 percent, further supported the positive movement.

Notably, the UK's Medicines and Healthcare products Regulatory Agency (MHRA) had already approved Pfizer-BioNTech COVID-19 vaccine on December 02, 2020.

Having understood the US market performance over the past one week, taking cues from major global news, and based on our technical analysis of 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 BT Group PLC (LON: BT.A) and Jupiter Fund Management PLC (LON: JUP) for the next 2-4 weeks duration.

BT Group PLC

BT Group PLC (LON: BT.A) is an FTSE-listed communications services company that provides fixed-voice services, broadband, and other IT services to customers in the UK and abroad. The company has operations in around 180 countries and is headquartered in London, United Kingdom. Highlighted below are the key price indicators: -

Price Action Analysis (on the Weekly Chart)

Last week, BT Group PLC’s prices broke the major resistance level of GBX 130.45 on December 03, 2020, and prices are sustaining above the breakout level. Now the next important resistance level appears to be at GBX 160.00 and in the short-term (2-4 weeks), the prices may test that level. Any further breakout above the GBX 160.00 accompanied by higher volumes may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~61 levels and formed positive divergence with the price action, indicating a positive trend in the stock. The weekly volumes are showing an increasing trend and seems 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 BT Group PLC is as follows

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that BT Group PLC is looking technically well-placed on the chart and we have a ‘Buy’ rating on the stock. The summary of our recommendation is as follows:

Jupiter Fund Management PLC

Jupiter Fund Management PLC (LON: JUP) is an FTSE-listed capital market company that manages equity investments on behalf of retail, private, and institutional client investors, hedge fund investors, and investment trusts. The company operates in Europe and Asia. 

Price Action Analysis (on the Weekly Chart)

JUP’s prices broke the downward trend line resistance of GBX 244.20 on the weekly charts on November 06, 2020, and for the last one month, prices are sustaining above the breakout level. Now the next important resistance level appears to be at GBX 333.00 and in the short-term (2-4 weeks), the prices may test that level.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~57 levels, indicating a positive trend in the stock. The weekly volume showing an increasing trend and seems 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 Jupiter Fund Management PLC is as follows: 

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that JUP is looking technically well-placed on the chart and we have a ‘Buy’ rating on the stock. 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 risks, currency risks, and social and political instability risks etc.

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 and we consider stocks with greater than or equal to 200,000 volumes as more liquid. 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.

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 December 07, 2020.

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

GBP: British pound sterling

GBX: British pence sterling

RSI: Relative Strength Index 

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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