France 40, Japan 225 and Germany 30 trade ideas

Chris discusses the France 40, Japan 225 and Germany 30 in today’s trade ideas.

Japan 225
Source: Bloomberg

France 40 cash

I have looked at the France 40 before, but given the increased prospect of quantitative easing to be announced on January 22, I think European equity markets should theoretically do well.

The France 40 cash continues to test the downtrend drawn from the June high at 4,420 and continues to find good supply. I would look to buy a close above the downtrend, but until then I am neutral and am cautiously looking at the MACD - which is close to crossing below the signal line - and stochastic, which is about to cross under the 80 level. Good support is seen at the 20-day moving average (currently at 4,320) and a close below here could suggest better conditions for short positions.

I would look to buy a break of the downtrend, or subsequently look at short positions on a close through the 20-day moving average for a potential move to the lower Bollinger band at 4,166.

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Japan 225 cash

On the daily chart there is a clear channel which I feel could present a good trading opportunity on the Nikkei. I would look to buy the index on a potential move down to the lower trend support and just above the 20-day moving average at 17,500. I would place stops below the 27 November low of 17,172, with a view that the index could trade back above the 18,000 level and onto the upper trend resistance at 18,310 over the coming weeks.

Germany 30 cash

Once again the German index has found sellers on moves above 10,000, despite European bonds finding good buying activity. As detailed in previous reports, I feel long positions could be taken on a weekly close above the June highs of 10,048. I am willing to accept a worse (or higher) price ere to confirm the market momentum is strong.

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