The FTSE 100 index made a bullish break-out on Tuesday as investors reflected on the ongoing earnings season. The index, which is made up of the top blue-chip British companies, rose to a high of €7,356, which was the highest level since June 10th of this year.
UK stocks rally
The FTSE 100 index rose sharply after the relatively strong results by Unilever, the giant Fast Moving Consumer Goods (FCMG) company in the world.
The company said that it was still hiking prices as inflation continue rising. The firm raised prices by about 11% as the cost of doing business surged internationally. Its results said that its underlying sales rose by 8.1% in the second quarter. Its stock rose by over 3% and hit the highest level since May.
The Rolls-Royce share price rose sharply as investors reflected on the new CEO who will replace Warren East. The industrial conglomerate will now be led by Tufan Erginbilgic, an executive who spent over 20 years at BP. He stepped down from the company in 2020. Analysts will be focused on his strategy to turn around the company.
The FTSE 100 index will next react to some other leading UK companies that are scheduled for this week. Some of the firms that will publish their results are Reckitt Benckiser, GSK, Haleon, Lloyds Bank, and British American Tobacco. Barclays will also publish its results this week.
Analysts expect that companies like Reckitt Benckiser and BAT will report higher costs and increased prices. On the other hand, banks like BT group, Barclays and Lloyds will have mixed results as higher rates are expected to boost their interest earnings.
The FTSE 100 index will also react to the upcoming big-tech earnings in Wall Street. Some of the most notable earnings to watch will be Google, Apple, and Microsoft. It will also react to the latest interest rate decision by the Federal Reserve.
FTSE 100 forecast
The four-hour chart shows that the FTSE 100 index has been in a strong bullish trend in the past few days. It is now trading at £7,357, which is an important resistance level since it struggled to move above since June.
The stock moved above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has continued soaring. It is also above the dots of the parabolic SAR indicator.
The index also formed an inverted head and shoulders pattern. Therefore, the index will likely keep rising as bulls target the next key resistance at £7,500
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