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.