Key index levels: technicals for FTSE, DAX and Dow

Markets remain in a consolidation phase, but it seems that they are fated to drift lower for the time being, with a lack of fresh catalysts not helping.

A Lufthansa first class cabin
Source: Bloomberg

FTSE hit by ex-dividend stocks

At the time of writing, the FTSE is engaged in a battle to hold above yesterday’s lows, hit by ex-dividend stocks and bad news from airlines and engineers.

What we can see is that upward progress remains absent. The index briefly touched 6880 during Monday’s session, but since then it has repeated the pattern of earlier in the year, being unable to hold above 6870.

On the downside, 6816 provides support and should help to stem any selling, but the loss of the 200-hour moving average signals that there is scope to test the Friday lows.

Lufthansa knocks DAX lower

A similar situation prevails here. Although it was able to close above 10,000 yesterday, the drop in Lufthansa shares following a surprise profit warning has led to a fall below the magic round number.

The 200-hour MA is acting as support for now, leaving the index within easy distance of 10,000, having briefly tested support close to 9942.

If the drop into oversold levels on an hourly chart is not reversed, then a move towards 9772 is possible, but at present it does seem like the battle for 10,000 is over yet.

Dow could target 17,000

It was another record high for the Dow Jones last night, which continued its winning streak even as the S&P 500 faltered for the first time in several sessions.

The 16,896 level is holding as support for now, leaving us in a range bound by this level on the bottom and 16,968 on the top. The index is heading towards oversold levels on an hourly chart, but may find support at the 100-hour MA.

A close above 16,970 should put the index on track for 17,000, continuing the run of fresh all-time highs.

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.