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

Last week, the benchmark FTSE All-Share Index (.FTAS) traded in a thin range of 3953.78 - 4007.25 and closed at 3983.85 with a marginal weekly gain of ~0.47 percent for the week ending April 30, 2021. Prices are sustaining above the resistance turned support level of 3900 for the past 3 weeks, indicating an upward direction for the index which may touch above the 4000 mark. On the weekly chart, prices are sustaining above an upward sloping trend line and continuously taking support of it. The momentum indicator RSI (14-period) is trading at ~65 level and appears supportive for the positive movement. Prices are well placed above trend-following indicators 21-period and 50-period SMA, further providing strength to the index.

As per the data released by the UK Office for National Statistics, general Government Gross Debt at the end of 2020 Q4 was 104.5% of GDP as compared to 100.50% in 2020 Q3, whereas general Government Deficit (or net borrowing) during Q4 (Oct to Dec) 2020 was 11.90% of GDP compared to 13.90% during the 2020 Q3. Market was unable to gauge any direction even after the release of the government’s debt and deficit data and continued to trade sideways. 

Global Markets Wrap-Up

Last week, Wall Street witnessed sideways to negative movement and the two benchmark indices ended with marginal change. S&P 500 again made a new lifetime high at 4218.7 and settled at 4181.17 with a marginal gain of ~0.02 percent, while NASDAQ Composite Index settled at 13,962.68 with a loss of ~0.39 percent for the week ending April 30, 2021.

As per the US Bureau of Labor Statistics, the weekly unemployment claims declined to 553,000 last week from 566,000 in the prior week and restricted sharp downside movement in the indices.

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 Britvic PLC (LON: BVIC) and St. Modwen Properties PLC (LON: SMP) for the next 2-4 weeks duration:

Britvic PLC

Britvic Plc (LON: BVIC) is a soft drink maker headquartered in Hemel Hempstead, England. The company engaged in the soft drink business under its name and other various brands. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

BVIC's prices broke a downward sloping trend line resistance at GBX 858.00 on March 29, 2021 and sustaining above the breakout level for the past three weeks. Now prices are approaching an immediate resistance level GBX 889 and a breakout of the same may generate a fresh upside movement for the stock. The next major resistance level on the charts appears at GBX 1079 and in the short-term (2-4 weeks) prices may test that level.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~62 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 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 Britvic PLC is as follows:

General Recommendation:

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

St. Modwen Properties PLC

St. Modwen Properties PLC (LON: SMP) is a UK-based property investment and regeneration specialist. The company engaged in building contemporary new houses across the UK. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

SMP's prices broke a major resistance level of GBX 424 by an upside on April 07, 2021 and since then hovering around the breakout level. Prices are also sustaining above an upward sloping trend line and recently started to move upside, indicating an upward direction for the stock. Now the next major resistance level appears at GBX 523.50 and prices may test that level in the coming sessions. 

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 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 St. Modwen Properties PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that St. Modwen Properties PLC is looking technically well-placed on the chart and 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 30, 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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