The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.
FTSE pushing towards 50-DMA
Yesterday the FTSE finished on its 100-day moving average, and today it is pushing up in the direction of the 50-DMA, making another attempt on 6800 a possibility.
After a hesitant start, akin to the action we saw in March, it looks like the FTSE’s rebound is now underway, and a close above the 20-DMA today would be the signal many were waiting for.
It seems too obvious to state, but so long as this index remains above the 200-DMA, predictions of the FTSE’s demise are premature. It would take a close below this before the default view switches to a more bearish disposition.
DAX supported by 200-DMA
Looking at the DAX chart, now the question is whether today’s bounce is a turnaround in the drift lower we’ve seen so far in July or a continuation of the general retreat.
If the former, then we need to see a close back above 9700 and 9740, and then ideally a progression over the coming week back through 9800.
If the latter, then the 9600 level will have to be breached, but even then the 200-DMA may step in as support once again.
A small uptick in the relative strength index today suggests the first scenario might have the upper hand at present, and a move above the 50-DMA would help to confirm this.
Dow eyes 17,150
Monday’s drop through 17,000 was but a quick trip in the direction of the 20-DMA, whose resilience over the past few weeks has been a sight to behold.
Now the index needs to clear the 17,150 high from last week, a relatively simple task given the strength of the rally.
On the downside the 20-DMA around 16,981 is still the support zone, with the 50-DMA as backup. This market has not seen a real test of the 50-DMA since mid-April, so one is probably overdue, but there is no sign of it just yet.