Another day, another dose of vaccine news …
Today, it was Pfizer’s turn to take over the spotlight from Moderna. The pharmaceutical giant said a final analysis of the data shows its Covid vaccine to be 95% effective and plans to submit an application to the FDA for emergency use within “days.” The news was greeted with glee as stock index futures extended their gains.
But the pace of the rally has slowed down somewhat in recent days, despite the vaccine news. Investors are torn between expectations of a more normal future with vaccine developments and the current situation with viral infections and lockdowns spreading rapidly, causing more economic suffering in the West. However, as there is now light at the end of the tunnel, the decline was limited for risky assets and the uptrend remained intact for global indices and other risky assets.
Unless something drastically changes, there is little reason for short sellers to intervene aggressively. So, I think the bulls will retain overall control of the price action of risky assets for some time to come.
FTSE sets the stage for a new escape
So it’s worth keeping a close eye on the FTSE, which looks rather bullish as investors warm more towards financials, materials, industrials and energy – components that make up the bulk of stocks listed in the market. the FTSE 100 index:
Source: ThinkMarkets and TradingView.com
The UK benchmark appears to be on a course towards 7100-ish, roughly point D of a potential Gartley – a technical model based on Fibonacci. Obviously, that target seems miles away, but at least the path of least resistance remains on the upside for now. The index has spent a few days consolidating near its recent highs and a further breakout may be on the cards to initially take us to a new post-lockdown high above the summer high of 6511.
Meanwhile, the index helped key support at 6300, which was previously resistance. As long as it does not drop below that level on a daily close basis, the short term bullish bias would remain intact. Looking at the slightly longer term technical bullish bias, 6040 is now the line in the sand for the bulls.