Levels to watch: FTSE, DAX and Dow

Having opened sharply lower this morning, indices are already seeing buyers coming back in after a plenitude of downward sessions.

A candlestick chart
Source: Bloomberg

FTSE buyers could take index to 6140

After losing over 300 points over the past two weeks, the FTSE 100 has now hit the bottom end of the rising channel that has been in effect since late August. If the area around 6020 holds as support, we may we may see some buying develop, which could take the index back on towards 6140 and then 6230. A breakout through the bottom of the channel and back below 6000 would suggest we are going to test support around 5900 and then on towards the August lows.

FTSE 100 chart

DAX starts strongly

The move back below 10,600 suggests that we could see fresh downside in here, with targets around 10,400 and then 10,270. However, a strong opening suggests that we may well see a test of 10,690 and then back towards 10,774. If the price can get back above the rising September/October trendline then this pullback may have passed, and we look towards 11,100 as the next target.

DAX chart

Dow above 17,171

So far futures are holding up well, with a move above the 100-day SMA (17,171) putting a more bullish aspect on the index after a weak period. It will require a move back through 17,295 to be sure that buyers are coming back in force, but if this happens we can contemplate a move back to 17,600. A move through 17,100 would confirm that more downside is on its way, with a further target around 16,800. 

Dow Jones chart

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