The UK 100 ’s post-Brexit recovery has slowed up since mid-month but the fact it remains within touching distance of its post-referendum highs leaves me rather optimistic. Those two weeks spent range trading sideways may yet prove the consolidation required to help the index continue with its reversal from 2016 lows. Next week’s peaking of earnings season as my colleague has discussed may well be the driver to send the index on its way, building upon a pair of existing bullish patterns.

So long as we can hold above 6600, a 3-week bullish flag remains valid with potential for another 600pts of gains. This could take us to fresh all-time highs of 7300, bolstered by a longer-term pattern (an 11-month bullish inverse head & shoulders reversal) that has already proved its worth with 300pt gains since a Brexit-inspired breakout at 6430.

The Bank of England (BoE), the Bank of Japan (BoJ) and the European Central Bank (ECB) all sound like they are set to deliver more stimulus this summer to help foster absent growth and inflation and counter any Brexit impact. With stimulus tending to benefit risk assets like equities, this intervention may be just what we need to help the UK Index maintain its northerly march.

And which stocks might be in the driving seat? Here’s a trio of options. Firstly, with Oil prices back down around July lows and the floor of a $45-55 range since April, any rebound could help the heavyweight Oil majors (BP, RDSb: 13% of the index) drive the index higher as an oversupplied Crude market moves closer to rebalancing.

Secondly, some of the non-cyclical high-yielding bond-proxies (BATS, GSK, VOD, AZN, DGE, RB, ULVR, UU) may remain in demand despite stellar gains as the world of fixed income sees yields evaporate, investors obliged to seek income from equities instead. Thirdly, commodities prices remain in recovery mode (just taking a breather) meaning any second wind they receive could well drag the Miners higher (watch the likes of GLEN, BLT, AAL and friends).

Of course there are many other shares that could assist the UK flagship index higher, and this week’s bid for ARM Holdings (43% premium!) is a case in point, but I can’t play all my cards here. I’ve got to keep something back for our clients. With this in mind why not sign up to get access to our full research offering to be kept abreast of what’s moving the markets and why. We’ve designed it with you in mind. Whether seasoned investor or just starting out, there is something for everyone to help them identify profitable trading opportunities.

With a busy week coming up, you’d do well to be kept in the loop rather than left out in the cold.

Mike van Dulken, Head of Research, 22 July