investors intelligence
UK Daily Hotline
29 September 2009 By Dr. J Wong, analyst
All it took was a small dose of M&As to revive the bullish spirit. The predatory US firms Xerox and Abbott pounced on their rivals on Monday, undeterred by the volatile environment. These daring raids sparked a rush of buying. The S&P500 Index ended up 1.8%, while in the UK, the FTSE100 Index reversed the morning’s weakness to climb 1.6%. This duly reaffirmed the 20-day moving average as uptrend support (see right). What is more, no less than five FTSE350 sector indices produced a bullish Key Day Reversal, a testament to the strong buying. Another sign is the large number of 52-week Highs.
What now? Holding a net-short Model Portfolio starting this week, we will exit some of the positions as an uptrend reassertion looks increasingly likely. Technically, the FTSE100’s 5200 resistance is vulnerable to a breakout.