Levels to watch: FTSE 100, DAX and Dow

Recent downside for indices brings about a potential buying opportunity, with clear uptrends in play.

Chart
Source: Bloomberg

FTSE 100 recovering after sharp sell-off

The FTSE 100 fell sharply yesterday, with the price breaking below the notable 7473 swing low. This confuses things a little. We saw the price fall into the 76.4% retracement, and has been recovering ever since.

Whether this is a retracement before we sell-off once more, or a recovery following a wider retracement, remains to be seen. The signals are a little more mixed here, and things will be a lot clearer with a break above 7532 or below 7427.

FTSE 100 chart

DAX drifts lower after recent gains

The DAX has been drifting lower since yesterday’s incredible rise for the index.

With that in mind, we await the next bullish breakout signal, which would come with a break through 13,473. Until then, the current retracement looks likely to resume. 

DAX chart

Dow expected to rally after 76.4% pullback

The Dow Jones is regaining ground after a sharp pullback into the 76.4% retracement overnight. The uptrend is very clear for this index and as such it makes sense to look for longs.

However, on this occasion we have seen a rare deep retracement into Fibonacci, trendline, and simple moving average (SMA) support. It looks like a recovery is expected from here, where an hourly close below 23,324 would be required to negate the uptrend.

Dow Jones chart

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.

Find articles by analysts