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That update also noted the strong resistance, led by the important G2 marker, which lay ahead at 4180. Recently, the CAC 40 has powered through that G2 resistance, an event that now allows me to project ahead to much higher targets.
French president Francois Hollande has proven to be a positive surprise in the 18 months since his Socialist party swept to power. Having been elected on policies which included big tax rises on corporations and the wealthy, interference in investment-banking businesses, reducing the retirement age (at a time when other nations understood the need to raise the age) and in subsidised job creation, the economic prospects looked grim for France. However, common sense has ultimately prevailed and many of these policies will now not become enacted.
President Hollande has been engaging on a global scale, with a willingness to commit France to counter-terrorism activities in Mali and Syria. In short, Mr Hollande has performed better than many might have predicted, and after years of underperformance, its stock market appears ready to reward the nation accordingly.
In breaking above the G2 level of 4180, the CAC has also shown a clean pair of heels to the resistance at 4108 –a level that represented a rise of 66.66% from the major low in March 2009, and which had kept the index in check since January 2010. I can now project ahead to a level 100% above this low. Supporting this target area are no less than three percentages that derive from lows of lesser importance and together they form my new target band defined as 4910-4937.
Recommendation: Buy. Target 4930. Stop-losses can be activated on momentum below 4100.