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

Last week, the benchmark FTSE All-Share Index (.FTAS) opened on a positive note and continued its bullish tone. The index also broke a major resistance level of 3900 during the week and made a new 52-week high of 3960.97. It settled above the 3900 marks at 3949.51 with a decent gain of ~2.60 percent for the week ending April 09, 2021. On the weekly chart, prices are now sustaining above resistance turned support level 3900 coupled with a downward sloping trend line breakout, indicating an upside move ahead. The momentum indicator RSI (14-period) is trading at ~64 levels and seems supportive for positive movement. Prices are well placed above trend-following indicators 21-period and 50-period SMA, providing further strength to the index.

Market sentiments boosted up as the region moved towards the second step of the government’s Four Step Roadmap to cautiously ease lockdown restrictions across the UK from April 12, 2021. Further, the lack of major economic events helped the index to move in one direction. 

Global Markets Wrap-Up

Last week, Wall Street continued its bullish movement and the two benchmark indices ended in the green. The S&P 500 made a new lifetime high and settled at 4128.80 with an overall gain of ~2.71 percent while NASDAQ Composite Index settled at 13,900.185 with an overall gain of ~3.12 percent for the week ending April 09, 2021.

Markets reacted positively despite higher US weekly unemployment claims data. As per the data released by the US Bureau of Labor Statistics last week, the weekly unemployment claims have surged to 744,000 from 728,000 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 Helios Towers PLC (LON: HTWS) and International Personal Finance PLC (LON: IPF) for the next 2-4 weeks duration:

Helios Towers PLC 

Helios Towers PLC (LON: HTWS) is a telecommunication tower infrastructure company. The company owns around 7000 mobile communication towers and has operations in African markets like Tanzania, Ghana, South Africa, etc. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

HTWS' prices are sustaining above an upward sloping trend line for the past 1 year and recently broke a downward sloping trend line resistance level at GBX 168 on March 30, 2021. For the past 2 weeks, prices are trading above the breakout level and indicating further upward movement for the stock. Now the next immediate resistance level is at GBX 200 and prices may test that level in the coming sessions. A decisive breakout above GBX 200 accompanied by the volume may extend buying in the stock till the major resistance level GBX 223.85.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~57 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, further providing support for an upward direction.

Financial Summary:

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

General Recommendation:

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

International Personal Finance PLC 

International Personal Finance PLC (LON: IPF) is a UK-based financial services company that provides unsecured consumer finance products. Its business segments include home credit and digital business. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

IPF's prices are forming a series of higher highs and higher lows for the past one year and indicating an overall upward trend for the stock. Recently, price broke a major resistance level of GBX 109.80 on April 08, 2021 after one month of consolidation and currently are trading above the breakout level. For the short-term (2-4 weeks), we can expect further positive movement in the stock, and it can test the major resistance level of GBX 160.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~69 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, further providing support for an upward direction.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for International Personal Finance PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that International Personal Finance PLC is looking technically well-placed on the chart and considering the stock is trading near to a 52-week high, 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 April 12, 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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