Levels to watch: FTSE, DAX and Dow

Indices have put in a good performance so far this morning, helped on the way by some suitably dovish comments from Mario Draghi. It looks like the traditionally strong pre-Thanksgiving performance from markets may be repeated.

A trader watches multiple screens
Source: Bloomberg

FTSE edges above 200-DMA

Our home index is peeking above the 200-DMA once again, although it has yet to breach the highs seen earlier in the week. If it can close above 6720 then 6770 and 6820 become immediate targets. Support is possible at 6680 and then 6650.

Yesterday’s dip towards the 200-hour MA and intraday oversold conditions proved to be the gift that the bulls were waiting for, if only they had been brave enough to grasp it. Any retest of this indicator in the coming week should probably still fall into the buying opportunity category.

DAX rally continues

The relentless rally in the DAX continues, smashing through the 9600 level and the 200-DMA for the first time since the beginning of September. A new target on the upside lies around 9680, and thence on to 9850.

Meanwhile, a pullback here targets 9480 and then 9370, with further possible support likely around 9250, as the index approaches the descending trendline from the September highs.

We are once again overbought on the hourly chart – a new trendline seems to have established itself from the Monday lows and finding support yesterday at 9380, so a drop back to 9470 is a potential entry point for longs into next week.

Dow rally still has legs?

US futures are continuing the move through 17,700 that began last night. With indices once again at all-time highs I remain reluctant to call a top in this rally, even if the Dow Jones is now registering the highest overbought reading on the daily RSI since May 2013.

Today’s move sees the index pulling firmly away from the hourly moving averages, with possible support around 17,680 and then 17,600. 

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