Levels to watch: FTSE, DAX and Dow

Will the resurgence seen in Western indices fade once more to continue the recent selloff, or is this the bulls getting back in charge?

Frankfurt financial district
Source: Bloomberg

FTSE regains ground to break through key resistance

The FTSE bounced off the 50-day SMA yesterday and has been moving higher ever since. The price has since moved back above the 6300 mark and used that level as support for another move higher, briefly passing through the key 6317 resistance level.

The ability to turn lower below 6300 and 6317 was key to my bearish outlook, and I remain bearish unless the price closes above 6317. Until that happens, I see is a good chance we could see a retracement lower given that the price has now hit the top of the Bollinger band while the stochastic and MACD histogram appear to be in the process of turning around.

Thus I would expect further downside unless it closes above 6317, with 6300, 6287 and 6253 likely support levels to watch in the near term.

DAX continues to look bearish below key level

A similar move higher for the DAX overnight has brought the price back up to the 10,018 resistance level. However, the most important resistance level to watch comes in the form of the 10,039 which would need to be broken to give a more bearish signal. That has not occurred, and thus I remain bearish for a move back below 9890. Support levels to watch are at 9957 and 9918.

Dow bounce needs to turn lower soon to retain bearish outlook

Just like the European markets, the Dow Jones has seen a strong overnight session bring the price back up towards a crucial resistance zone, with it needing to break lower once more between the 17,018 and 17,037 levels.

Looking at this whole move in context, a move back to this resistance zone would make sense as the kind of thing we would see in the infancy of a selloff. Thus I remain bearish while we remain below the 17,018-17,037 resistance zone. Support levels to watch come in around 16,964, 16,937 and 16,886.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research 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 and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.