Since the big drop in September 2022, one of the leading European stock market indices, UK100, attracted a lot of the demand and by February 2023 the index rose with more than 1300 points! Buyers pushed the values to above 8000, which was its all time high. The strong up trend is still valid and this is confirmed by the Alligator indicator – all of its 3 moving average lines point north. For the past few weeks however we notice a drop.

Since May, UK100 lost more than 400 points. The current level of 7445 is approaching the 50 Week EMA, and just for the past week we witnessed a drop of another 130 points. The index is clearly correcting and this is caused by a number of factors. Inflation levels in the UK are worse than expected, almost a million house holds are falling behind with their mortgages and the BoE surprisingly increased the rates with x2 the expected 0.25% hike! Stocks dont like higher interest rates as this limits new business and further growth. 

Looking at other major stock market indices we notice similar price action. The current drop in the international stock market is fueled now both by fear, but also profit taking from all those early buyers from a few months ago. Technically speaking however, UK100 is still in an up trend and the the oscillator indicators signal an oversold condition. To see our anticipated direction and entry price, please visit our Go Premium section.