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

Last week, the benchmark FTSE All-Share Index (.FTAS) started on a negative note while later picked up the bullish trend. The index also broke an important psychological resistance level of 4000 during the week and made a new 52-week high of 4016.40. The index achieved fourth consecutive weekly gains and settled at 4006.76 with a gain of ~1.45 percent for the week ending April 16, 2021. The recent week started on a marginal negative tone; however, prices are still hovering around the 4000 mark. As per the weekly chart, prices are now sustaining above a downward sloping trend line breakout, indicating further upside move for the index. The momentum indicator RSI (14-period) is trading at ~67 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.

The series of economic data points released by the UK Office for National Statistics last week such as GDP monthly estimate, Index of Production, and Index of Services improved marginally although economic activities broadly remained unchanged due to government restrictions.

Global Markets Wrap-Up

Last week, Wall Street boosted up as the two benchmark indices ended in the green. The S&P 500 recorded a peak of 4191.31 and settled at 4185.47 with an overall weekly gain of ~1.37 percent, while NASDAQ Composite Index settled at 14,052.342 with an overall weekly gain of ~1.10 percent for the week ending April 16, 2021.

Markets reacted positively due to lower US weekly unemployment claims data. As per the data released by the US Bureau of Labor Statistics last week, the weekly unemployment claims declined impressively by 193,000 to 576,000 from 769,000 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 Centamin PLC (LON: CEY) and RPS Group PLC (LON: RPS) for the next 2-4 weeks duration:

Centamin PLC

Centamin PLC (LON: CEY) is a gold producer company engaged in the business of production and exploration of precious metals. The company operates in Jersey, Australia, Egypt, Burkina Faso and Cote d’Ivoire. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

CEY's prices started to move upside after taking the support of an upward sloping trend line around GBX 100 on March 02, 2021. Recently prices also broke a downward sloping trend line resistance at GBX 109 on April 08, 2021 and since then sustaining above the breakout level, further indicating an upside direction for the stock. Now the next immediate resistance level is at GBX 137.20 and prices may test that level in the short-term (2-4 weeks). A decisive breakout above GBX 137.20 accompanied by the volume may extend buying in the stock till the major resistance level GBX 152.80.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~45 levels and recovered from the lower levels, indicating a positive trend for the stock. The weekly volumes also seem supportive of an upside movement. The 21-period SMA is below CMP and providing support for an upward direction; however, the 50-period SMA is above CMP and acting as important resistance for the stock.

Financial Summary: 

Summary of the Key Financial Metrics for the past four years for Centamin PLC (LON: CEY) is as follows:

General Recommendation: 

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

RPS Group PLC

RPS Group PLC (LON: RPS) is a global consultancy service provider. The company provides management consultancy in planning & development, energy and environmental management to the clients. The company has a presence in various countries like UK, Ireland, Netherlands, Russia, the US, Canada, etc. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

RPS' prices are sustaining above an upward sloping trend line for the past 8 months, indicating a positive direction for the stock. Prices also broke a major resistance level of GBX 88.90 on March 02, 2021 and since then hovering around the breakout level, further supporting an upside stance for stock. For the short-term (2-4 weeks), we can expect further positive movement in the stock, and it can text the major resistance level of GBX 135.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~66 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 RPS Group PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that RPS Group 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 19, 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.

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.