Key index levels: technicals for FTSE, DAX and Dow

Profit-taking seems to be in order right now with higher oil prices, following the Iraq upheavals and the resounding warning from the World Bank yesterday playing with upside sentiment.

A man looking at data on four screens
Source: Bloomberg

FTSE stuck in sideways pattern

The 200-period moving average on the four-hour chart has become rather interesting. The FTSE has not traded through this metric with any real conviction so the MA is acting as a decent support zone.

The 6820-25 level is now the one the watch, and if we see a concerted move down the next target will be 6803 with 6770-80 the key support below that. The 50-day moving average resides at this basic support level so any indication of a daily close below it would likely see additional declines.

For the moment, we appear to be stuck in a sideways pattern with little news impetus; a break through the 6860 level is needed to break this.

Dow targets 16,968

The overbought relative strength index signal on the Dow Jones daily chart, along with some indecisive trading action earlier this week, saw the market indulge in some profit-taking; the trend is still intact.

The 16,820 level has lent support to this downside and the market looks set to open higher at 16,864.

The 50-period MA on the H4 chart is the one to watch, and it has been a decent support metric since price action rose through it on 22 May. A break below it targets 16,730-40.

The hourly chart continues to trade in the bullish channel from the 20 May lows, thus we may continue to push back towards the recent highs so long as the trend remains unbroken.

We will need to see the 16,968 level breached if the holy grail of 17,000 is to become a possibility.

DAX finding resistance at 200-hour MA

Again the trend remains intact for the DAX on the medium term. In the short-term horizon, the price action is below the key hourly moving averages so resistance is found at the 200-hour MA around 9965.

A rise through here brings us to the 9990 level. Rising support from the 15 April lows should support any shallow declines around 9900. A break below this level targets 9885.

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