Levels to watch: FTSE 100, DAX and Dow
Friday’s sharp sell-off has raised the chance of further downside for the indices, yet given the size of that downward move, could we see a short-term rebound?
FTSE 100 tumbles into deep retracement
Growth concerns saw indices come off sharply towards the end of last week, with the FTSE 100 breaking into a crucial zone of Fibonacci support. The price has moved into the area between the 61.8% retracement of the 7039-7371 move, and 76.4% retracement of the 7076-7371 rally.
There is a good chance that we will soon see this index turn higher, with this sell-off looking like a good buying opportunity as long as we do not see a break below the 7076 support level. However, with the DAX and Dow looking more at risk, it is worth being aware that such outperformance in the FTSE 100 would likely require a weakening pound.
DAX turning higher after recent downturn
The DAX is starting to find some buyers, following on from a sharp decline on Friday. The drop below 11,401 points towards a likely bearish move coming back into play before long.
However, with a bullish engulfing pattern potentially forming this morning, we could see a rebound over the short term. A break below 11,269 would signal a likely continuation of the recent bearish trend. Watch for a possible rally out of this falling wedge on the stochastic oscillator to add further confidence of an impending bullish phase.
Dow sell-off brings the price closer to key support level
The Dow Jones has tumbled into a two-week low, with the index approaching the crucial 25,216 support level.
There is a good chance that we will soon see another rebound, even if that move is a retracement of Friday’s sell-off. Ultimately, we would need to see a break above 26,011 to bring a wider bullish picture back into play. Meanwhile, a break below 25,216 would confirm a potential wider top being in place for the Dow.
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. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100, 1.2 on the Germany 40, and 0.4 on the US 500
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100, 1.2 on the Germany 40, and 0.4 on the US 500
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
