Long FTSE 100 for the next 6 months
Idea: Long FTSE 100 for the next 6 months
Rationale:
On the technical side, 50 Moving Average (MA) has crossed its 200 MA. This is a strong bullish signal called Golden Cross
On the fundamental side, FTSE 100 companies generate more than 75% of their revenue outside the UK. The index includes many companies in the financial and energy sectors which are cyclical and may recover if there is a shift from growth to value.
On the valuation front, the UK stocks are relative cheap to the rest of the MSCI World and trade at a discount. Currently FTSE 100 is 20% below the pre-pandemic levels.
Risk: Brexit no-deal and fall in the British pound (albeit this could be offset by making UK exports cheaper and boost stocks)
I would play this tactical idea in two ways depending on the risk aversion:
1. Buy a call option on the FTSE 100 with an out of the money strike 7300, expiry 18 June 2021
2. Buy an ETF which replicates the FTSE 100
Time will tell
Matteo
Rationale:
On the technical side, 50 Moving Average (MA) has crossed its 200 MA. This is a strong bullish signal called Golden Cross
On the fundamental side, FTSE 100 companies generate more than 75% of their revenue outside the UK. The index includes many companies in the financial and energy sectors which are cyclical and may recover if there is a shift from growth to value.
On the valuation front, the UK stocks are relative cheap to the rest of the MSCI World and trade at a discount. Currently FTSE 100 is 20% below the pre-pandemic levels.
Risk: Brexit no-deal and fall in the British pound (albeit this could be offset by making UK exports cheaper and boost stocks)
I would play this tactical idea in two ways depending on the risk aversion:
1. Buy a call option on the FTSE 100 with an out of the money strike 7300, expiry 18 June 2021
2. Buy an ETF which replicates the FTSE 100
Time will tell
Matteo