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

As per the Q3 (July to Sept) 2020 GDP data released by the Office for National Statistics on May 05, 2021, all four countries in the UK witnessed positive QoQ growth. England showed the highest growth of 17.2%, followed by Scotland, Northern Ireland, and Wales with 15.8%, 15.4%, and 14.4% growth, respectively which boosted the market sentiments. The Bank of England kept the interest rate at 0.1% and quantitative easing at £895 billion in Monetary Policy Report (May 2021) to ensure recovery and to achieve the inflation target that further supported the index.

Global Markets Wrap-Up

Last week, Wall Street witnessed mixed movement as the two benchmark indices were unable to show the same direction. S&P 500 again made a new lifetime high at 4238.04 and settled at 4232.60 with a gain of ~1.23 percent; however, NASDAQ Composite Index settled at 13,752.24 with a loss of ~1.51 percent for the week ending May 07, 2021. Markets reacted positively to the weekly US unemployment claims data published by the US Bureau of Labor Statistics that declined to 498,000 from 590,000 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 Great Portland Estates PLC (LON: GPOR) and TT Electronics PLC (LON: TTG) for the next 2-4 weeks duration:

Great Portland Estates PLC 

Great Portland Estates PLC (LON: GPOR) is a property investment company. Its business segments includethe development and purchase of retail, office and residential properties. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

GPOR's prices broke an ascending triangle pattern (bullish continuation) byan upside on May 04, 2021 and sustaining above the breakout level, indicating a positive direction for the stock. Prices also broke a major resistance level of GBX 727.80 in the last trading session, further supporting a positive movement. Now the next major resistance level appears at GBX 858.50 and prices may test the level in the short-term (2-4 weeks). A breakout above the GBX 858.50 accompanied by the volume may extend buying in the stock till GBX 899 level. 

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~65.55 levels and indicating a positive trend for the stock. The weekly volumes also seem supportive of an upside movement. The CMP is above the 21-period and 50-period SMA with a positive crossover, further providing support for an upward direction.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for Great Portland Estates PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Great Portland Estates PLC is looking technically well-placed on the chart and we have a ‘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:

TT Electronics PLC

TT Electronics PLC (LON: TTG) is a UK-based manufacturer and provider of electronic components and services worldwide. The company deals in the manufacturing of sensors, semiconductors, resistors, magnetics, connectors, etc. Noted below are the key price indicators for the stock: 

Price Action Analysis (on the Weekly Chart)               

TTG's prices are trading above an upward sloping trend line for more than a year and broke a downward sloping trend line by an upside on May 07, 2021, indicating a positive direction for the stock. Prices broke the trend line after 6 weeks of consolidation and for the short-term (2-4 weeks), we can expect continuity of an upside movement. Now the next major resistance level appears at GBX 285 and prices may test the level. A breakout above the GBX 285 backed by volumes may extend buying in the stock till GBX 300 level.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~67.18 levels and indicating a positive trend for the stock. The weekly volumes seem supportive of an upside movement. The CMP is above the 21-period and 50-period SMA with a positive crossover, further providing support for an upward direction.

Financial Summary: 

Summary of the Key Financial Metrics for the past four years for TT Electronics PLC is as follows: 

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that TT Electronics 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 for 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 risks, 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 May 10, 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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