THE TIPSTER
THE recent uncertainty over the state of the global economy has left the major indices bouncing around without any clear direction. The FTSE 100 is currently at the lows of its recent range. With some big numbers out this morning, there is a chance that we could well get a degree of excitement for the UK blue chip index. The obvious levels on the upside are that of 6,100 and 6,000 as the market has failed here a number of times in the last few months. However, after closing below the 200 day moving average last week, a weaker number this morning could well sink the FTSE lower still. The growing uncertainty around economic recovery is likely to make the major indices around the world a choppy place to trade, and should give some good signals on both the upside and the downside. Alpari UK is quoting the FTSE 100 at 5,777-5,779.
Imperial Tobacco has predicted that the announcement by a rival brand that it will reduce its prices in Spain could lead to a £110m decline in 2011 profits, as it may have to follow suit to remain in line with its competitors. Spain’s ban of smoking in public places has had an effect on its share price. But that said, UBS retains its buy recommendation with a target price of 2,385.0p. Capital CFDs quotes 2,059.9p-2,063.1p.
J Sainsbury issues a trading statement tomorrow, and it is feared by some that it will show continuing reluctance from consumers to spend. Compared to a dismal March, April saw a slight lift in sales thanks to good weather and the bank holidays. But analysts expect that May saw sales fall again. A trend line going back to 2008 halted the slide on Friday – around 324p – but we may well see stronger support around 310p-315p tested this week. Spread Co offers a spread on Sainsbury’s of 327.4p-328.1p.
Xstrata is sitting right on a major support area set by the lows of the year around the £13 mark. The stock has bounced from this area on several occasions so far this year, and often rallied to test its 2011 highs. Can it do it again? There’s always a chance it could repeat the past by bouncing off the support and Capital CFDs quotes 1,336.8p-1,339.2p.
Ahead of Thursday’s figures, traders will be able to take a position on Ashtead Group when it comes out with its full year figures. This will give traders an ability to trade on their perception of the construction market and whether there has been a slowdown as the construction plant hire firm should give an indication of this. WorldSpreads offers a spread of 184.6p-184.8p.