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Key index levels: The technicals – FTSE, DAX and Dow

Equity indices look slightly more risk-off today, with the FTSE pulling back from 6700 and the Dow failing to make a clean break of 16,000.

FTSE on the back foot

The failure to capitalise on the move through the 6700 level has left the FTSE 100 on the back foot today. With the support of 6640 breached, the 100-DMA is now in play as the support at 6630. The 100-hour moving average and the 50% Fibonacci retracement from the January highs (6855) to the February lows (6395) also occur at this level.

Yesterday’s price action produced a gravestone doji which confirmed the lack of conviction for additional upside. With the current daily candle looking bearish, we may see at best a range-bound day with price action oscillating between the 6670/80 and 6630 levels.

Any break below the present lows of the day brings the 6603 and 6571 (200DMA) levels into focus.

DAX faring better

The seven-month trend from the June 2013 lows is still very much intact for the DAX. The German index has fared better in early trade but lacks the momentum to break above the 9600 level. Below this resistance point the divergence on the daily RSI has been bearish, so there is a chance we may make a return visit to the 50-DMA at 6407. A break below 9470 would help to validate.

For now, the 50-hour moving average and the 9500 psychological level are supporting the shorter-term trend. Any break above 9600 and a close on the daily basis argue for a move higher towards 6674.

Dow sees V-shaped recovery

The Dow Jones is currently slated to open at 15,915. Last week’s bullish candle tended to put the bias on the upside, with something of a V-shaped recovery on the daily chart from the lows of 15,345. The 16,030 level is becoming a haven for profit-taking and the 15,968 level is the near-term barrier (50% retracement from the December highs to last week’s lows).

A break below the 15,900 level brings the 100-DMA and the 38.2% retracement levels into focus at 15,820/40. 

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