DAX, Nasdaq 100 - Approaching Key Resistance


Stocks continued higher with techs leading the way. Most tech giants (AMZN, GOOG, FB, MSFT, INTC) will be reporting next week, and will have to confirm what the markets are starting to anticipate to have any chance of returning to the highs.

There may be some uncertainty on the social media front; not so much on the results, which should be unaffected by recent woes, but more on the company guidance. Nevertheless, this is not affecting the whole sector, whose fundamentals have not really changed since last quarter. They may even have benefitted from a larger technology spend with the tax reform.  

On a negative note – like the other banks, Goldman Sachs beat expectation but was unable to maintain a positive ground. The financial sector is the only sector that finished in the red.

Blue chips to report today: Morgan Stanley, Alcoa, Amex and Accor and Danone in France

To keep in mind for the coming weeks: this earnings seasons will be a big test. The inability for equity markets to make news highs on the back of it would be worrisome, and would revive fears of markets peaking. Markets could enter longer-term bear cycle.

The DAX is approaching a strong resistance zone around 12600/12650 and it will be hard to break on a first attempt. Expect an initial pullback towards 12530 – 12470 before a move higher.  A break above 12650 opens the way to 12740 and 12800.

Support: 12530, 12480, 12370

Resistance: 12600, 12650 (200D MA), 12740

Similarly the NASDAQ has reached the 61.8% retracement level of the recent downmove at 2840, and could hit some resistance.  A break higher would open the way for the March highs over the next few days.

Support: 6800, 6745 (50% level), 6700

Resistance: 6845 (61.8%), 6930, 7000

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