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

Last week, the benchmark FTSE All-Share Index (.FTAS) started on a positive note and made a high of 3649.81 on November 25, 2020, but in the second half of the week, the index witnessed a profit booking and settled at 3593.68 with a marginal gain of ~0.20 percent weekly for the week ending November 27, 2020. The current week also started on a negative note; however, prices are still hovering around the 3600 level. The index is still trading near to 61.80 percent retracement of the previous bearish rally. A breakout above the 3660 level may take the index to the 3900 level in a short time span.

 

Global Markets Wrap-Up

Wall Street witnessed a decent upside movement last week and Dow Jones Industrial Average made an all-time new high of 30116.51 on November 24, 2020. S&P 500 settled at 3638.35 with an overall gain of ~2.27 percent weekly basis while Dow Jones Industrial Average settled at 29910.37 with an overall gain of ~2.21 percent weekly basis for the week ending November 27, 2020. The current week started on a negative note and prices fell from the record high due to profit booking. The US market rallied on the expectation that the US Food and Drug Administration may approve the COVID-19 vaccine in a meeting on December 10, 2020. The regulatory bodies in the UK may also approve a COVID-19 vaccine developed jointly by Pfizer Inc. (NYSE: PFE) and BioNTech SE’s (NASDAQ: BNTX), support the market sentiment.

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

 

WPP PLC

WPP PLC (LON: WPP) is an FTSE-listed communication services company headquartered in London. It offers advertising, media, branding, public relation & public affairs, healthcare communication, etc. services and operates in 112 locations across the world. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

WPP PLC’s prices broke the ascending triangle pattern on the weekly charts on November 10, 2020, and for the past two weeks, prices are sustaining around the breakout level. Now the next important resistance level appears to be at GBX 955 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 level and formed positive divergence with the price action, indicating a positive trend in the stock. The weekly volume also 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 WPP PLC is as follows:

General Recommendation:

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

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)

Standard Life Aberdeen PLC’s prices broke the symmetrical triangle pattern on the weekly charts on November 09, 2020, and for the past two weeks, prices are sustaining above the breakout level. Now the next important resistance level appears to be at GBX 340 and in the short-term (2-4 weeks), the prices may test that level. Any further breakout above the GBX 340 level accompanied by the higher volumes may further extend the buying rally in the stock to GBX 380 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 also appears to be 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 Standard Life Aberdeen PLCis 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. 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 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. 

The reference date for all price data, volumes, technical indicators, support, and resistance levels is November 30, 2020.

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.

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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