Levels to watch: FTSE, DAX and Dow

Further losses have been seen in equity indices this morning, as the hangover from last night’s sell-off continues to haunt traders.

US trader at stock exchange
Source: Bloomberg

FTSE 100 at risk from downside
Yesterday’s rally turned to despair in the afternoon, and with the index testing the lows of the month towards 6060, the risk is now that the downside accelerates and we see a dramatic move below 6000, down towards 5920.

Intraday, the index is oversold, so it may not be wise to chase the move, but overall the index has acquired a firm bearish dimension. Bulls would need a close back above 6120 to reverse the current outlook.

DAX close to last week’s lows
Last week’s low at 9734 is now just a short hop away, so if the index closes below here, we look towards 9520 and then 9440 as the next possible area where support may materialise.

The approach now would be to sell into strength as and when rallies appear, rather than chasing the current extended downside move.

A close above 10,000 would be needed to restore any hope of a bullish outlook, and even this then needs to break the 200-day simple moving average (SMA) at 10,166.

Dow Jones rests on 50-day SMA
Once again, the index is resting on the 50-day SMA (17,641), and a break below here, followed on by a move below last Friday’s low towards 17,550.

Below this the 17,500 area, the lows of early April, would come into play. There seems little hope of a firm rally unless the price gets back to 17,900. 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.