Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Levels to watch: FTSE, DAX and Dow

A major downturn for stocks spark calls for a market top. Are we just seeing a retracement or something more significant?

New York Stock Exchange traders
Source: Bloomberg

FTSE falls into major support confluence

The FTSE has followed its US counterparts in the past 24 hours, with the index falling to a key support level. The cluster of trendline, Fibonacci (76.4%) and simple moving average (200-period on four-hour) support at the current 7306 region means this is a critical juncture.

An hourly close below that level would point towards further downside, where we would come closer to negating the uptrend in play over the past two-months. For that to happen we need to see a break back below 7262. Until then, there is a chance this is just a retracement set within a wider uptrend. Previous occasions of an oversold stochastic with a deep retracement have typically sparked another surge higher. Will we see the same here?

FTSE chart

DAX double top points to losses

The DAX has broken below the key 11,909 support level, with the index continuing to move lower this morning.

There is a chance we could see the index move into the 76.4% retracement and find support on that level, which highlights the fact a break below 11,720 would provide greater confidence we are going to see a more protracted downturn.

DAX chart

Dow consolidating after sharp downturn

The Dow Jones is consolidating this morning, after a hugely significant pullback yesterday. We are clearly at risk of a rebound, while another leg lower is also a distinct possibility. Signs suggesting which is going to occur may be found on the shorter intraday charts.

The 30-minute chart below highlights the 20,611 level is currently the mark to break to the downside, where an hourly close below there would likely spark another leg lower. Conversely, an hourly close above 20,665 would start to bring a more bullish outlook.

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 an article

Find articles by writer