Levels to watch: FTSE, DAX and Dow

Indices rally sharply following yesterday’s pullback. Does this signal the beginning of a recovery in the major markets?

US trader
Source: Bloomberg

FTSE regaining ground amid choppy week

Yesterday saw the FTSE 100 lose ground following a sharp V-shaped recovery on Friday. However, this now puts us in a more difficult position where we have both higher highs and lower lows.

As such, there is no distinct trend in place on the shorter/intraday timeframes. A break through 6179 would put us back into a more bullish mindset, whereas a break through 6105 would negate this view.

Resistance levels of note are 6179, 6220 and 6230, whereas support comes in around 6105, 6060 and 6054.

FTSE

DAX moving into bullish phase

The DAX is clearly more advanced in its rally compared to the FTSE, with the German index breaking through the key 10,070 resistance level this morning.

An hourly close above this level would provide a strong signal of intent, where further gains are likely to ensue. Subsequent resistance levels would be at 10,096, 10,121 and 10,154.

We would need to see an hourly close below 9950 to negate this bullish view.

DAX

Dow breaking through key resistance

The Dow Jones has broken higher this morning, following a 50% pullback yesterday. We are now creating new higher highs to accompany the higher low set yesterday afternoon. This is the first time we have seen this occur since an attempted rally in late April.

As such, there is a good chance we are seeing an end to the recent sell-off, with buyers coming back into the fold. Pullbacks are therefore seen as opportunities to get long, with a bullish view held unless we see an hourly close below yesterday’s low of 17,669. The next major resistance levels to watch are 17,845 and 17,862.

DJ

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