Dividend Investments : Stock markets are broadly higher and the UK economy looks to be supportive of these trends. Growth in gross domestic product (GDP) figures and in Industrial Production has prompted the Bank of England to drastically revise its interest rate schedule as there is now an indication that consumer inflation levels could begin to become problematic if further action is not taken. This has sent valuations in the GBP higher, but this has also led to some stalling in the FTSE 100 stock index.

At this stage, it is not entirely clear whether these changes in Bank of England monetary policy will be enough to change the underlying trends in the FTSE 100. Underlying momentum in stock markets has been undeniable since the summer, and even with higher interest rates it is looking as though the FTSE 100 should continue to hold support near the 7140 level.

The 200-day EMA is quickly rising and this is indicative of the larger bull trend that is seen in the UK stock index. Corporate earnings in tech stocks have been largely supportive and this should be set to continue well into the next few quarters and so even if we do see further interest rate changes from the Bank of England, it is not likely that we will break 7140 support in the FTSE 100.

All investors should be positioning for potential risks, however, and this is something that would occur if we were to see prices fall through the 50-day moving average. This would ultimately be a negative harbinger of things to come, and it would that it is time for investors to start considering bearish PUT options as a means for capitalizing on the downside. In any case, the positively momentum in the FTSE 100 remains strong and this supports the outlook for long trades or CALL options when prices are trading at the price levels that are seen currently.

By Dividend Investments

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