Levels to watch: FTSE, DAX and S&P 500

Friday’s wobble in risk appetite has been swiftly reversed, with more gains across the board so far this morning. 

Source: Bloomberg

FTSE 100 could push to 6120

A gap lower overnight has been swiftly reversed, with the index back at 6000 once more. Having held its ground well during last week it appears we now have the room to move higher.

Crucial to this will be a move above the top end of the downward channel, ideally achieved through a rally above 6043, the first key pivot point. This would leave the way clear for a push on to the 6120-6130 area.

From there the next stop would be the 6300 area, where the index topped out at the end of December.

Any renewed selling will need to move below 5900, which would then bring 5820 into view.


DAX eyes 9860

Key resistance to any rally lies around 9560, the high from last week and also the support level from 26 January.

A break above here means that the next destination is the 50-day simple moving average at 9860, although there is the possibility of some resistance around 9650 too for the DAX.

Buy the dips continues to pay dividends here, with the market back above the rising hourly trendline only adding to the generally optimistic tone. Shorts look to be out of luck unless the price moves below 9300, with a drop below the January low around 9250 really the only catalyst for fresh bearish developments.

S&P 500 sees 'buy on the dips' traders

US markets got their first real dip on Friday, but have recovered in fine form, with the S&P 500 now heading towards the 50-day SMA (1944) for the first time this year.

The real challenge is a push above 1950, which marked the high watermark of every bounce in 2016, but if this develops then we look to the 2000 level as the next real target.

As with the other indices, ‘buy on the dips’ seems to be the order of the day, which will at least provide the opportunity for others to get on board this rally. 

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