Post General Election FTSE 100 Update

Monday, 16th December 2019 13:37 - by Rajan Dhall

So the general election was a massive success for the Conservative party and UK listed companies it seems.

The FTSE 250 has edged it in terms of performance but I wanted to focus on a couple of sectors in the main FTSE 100 index. 

Property companies have really seemed to have accelerated which I understand as the Labour social housing policy may have hit them. The thing is it's hard to see how much the Conservatives are going to change the policy on housing either. They have notoriously under-delivered on their production targets and Its not clear whether they will extend help to buy. Either way, the performance has been phenomenal and some of the targets from this old post (https://www.lse.co.uk/blogs/expert/uk-homebuilders-technical-analysis.html) have been achieved. 

The banks have also been on a great run but worldwide banks will still be under pressure. Interest rates are not going to rise anytime soon and compliance is killing the investment banking industry. The thing is organising a deal with a EU banking passport will be massive for the UK banking sector. Boris Johnson is very pro-business so I think the sector will be ok. This could mean that some banks are slightly undervalued at the moment but more information is needed so we get a clearer idea of what is going on post-Brexit. 

Looking at the FTSE 100 technicals now, there are a few upside targets I am keeping an eye on. The wave high of 7727.5 and the all-time high of 7903.5 could be undertreated if this momentum can continue. The volume moving though stocks at the moment is massive as investors were sitting on the sidelines waiting for the outcome of the general election and Brexit. Now 7446.0 has been broken, if the price pulls back it could provide some support. Beyond that, there are a cluster of areas between there and 7000 that could halt any weakness. It was a decent trendline break and there was lots of momentum but now there is another trendline which form from the 7903.5 high and 7737.5 top that could act as resistance so be aware of that. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.