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

Last week, the benchmark FTSE All-Share Index (.FTAS) traded in a range of ~4029 to ~4072 and settled at 4068.33 with a marginal gain of ~0.64 percent for the week ending June 11, 2021. The recent week also started on a positive note and prices made a new 52-week high of 4097.16. The index is trading with a positive bias on the chart and sustaining above the 4000 mark. However, on the weekly chart, prices were still unable to break the upper band of a rising wedge formation that is acting as a major resistance level. The leading indicator RSI (14-period) is trading at ~66.92 levels and seems supportive of a positive movement. Prices are well placed above trend-following indicators 21-period and 50-period SMA, further providing strength to the index.

The index is supported by economic data such as GDP monthly estimate and Index of Services released by the Office for National Statistics. As per the data, the GDP in April 2021 is estimated to have risen by 2.3%, the fastest monthly growth since July 2020 coupled with the Index of Services which grew by 3.4% between March 2021 and April 2021. However, the Index of Production for April 2021 fell by 1.3% between March 2021 and April 2021 and limited the upside gain in the index.

Global Markets Wrap-Up

Last week, Wall Street continued bullish movement and the two benchmark indices ended in green. S&P 500 settled at 4247.44 with a gain of ~0.41 percent, while NASDAQ Composite Index settled at 14069.42 with a gain of ~1.85 percent for the week ending June 11, 2021. As per the data released by the US Bureau of Labor Statistics, the US weekly unemployment claims declined further to 376,000 from 385,000 in the prior week and supported the market sentiments.

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 Standard Life Aberdeen PLC (LON: SLA) and Hammerson PLC (LON: HMSO) for the next 2-4 weeks duration:

Standard Life Aberdeen PLC 

Standard Life Aberdeen PLC (LON: SLA) is an FTSE-listed UK based capital market company, headquartered in Scotland. It provides asset management services to institutional, wholesale, and strategic insurance clients. It also offers financial planning, wealth management, and advisory services. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

SLA's prices are sustaining above a downward sloping trend line breakout for the past 5 months, indicating an upward direction for the stock. Prices recently started to move upside after taking support from an upward sloping trendline, further supporting a positive stance. Now the next major resistance level appears at GBX 333.50, and prices may test the level in the short-term (2-4 weeks). A further breakout above GBX 333.50 backed by volumes may extend buying in the stock till GBX 381 level.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~51.04 levels and indicating a positive trend for the stock. The weekly volumes also seem supportive of an upside movement. The CMP is above the 50-period SMA, providing support for an upward direction, however, the 21-period SMA acts as a resistance for the stock.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for that Standard Life Aberdeen PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Standard Life Aberdeen 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:

Hammerson PLC

Hammerson PLC (LON: HMSO) is an UK-based real estate investment trust (REIT). The company owns and invests mainly the retail and office premises. The company has business operations in UK, France, Ireland, Spain, and Germany. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

HMSO's prices broke a downward sloping trend line resistance by an upside on June 09, 2021, and since then sustaining above the breakout level, indicating an upward direction for the stock. Prices recently also broke a major resistance level of GBX 43.50, further supporting a positive stance. Now the next major resistance level appears at GBX 59.60 and prices may test the level in the short-term (2-4 weeks).

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~66.92 levels and indicating a positive trend for the stock. The weekly volumes are 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, further providing support for an upward direction.

Financial Summary: 

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

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Hammerson PLC is looking technically well-placed on the chart, 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.

Technical Indicators Defined:

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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. 

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. 

Note: The reference date for all price data, volumes, technical indicators, support, and resistance levels is June 14, 2021. The reference data in this report has been partly sourced from REFINITIV. 

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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