Levels to watch: FTSE, DAX and Dow

The shortened London session is seeing the FTSE 100 holding above 6600, while the DAX is closed for Christmas Eve. In the US, the Dow Jones closed above 18,000 for the first time yesterday.

German stock exchange
Source: Bloomberg

FTSE eyes 200-DMA

For now 6620 remains as upside resistance for the FTSE, although the final half hour of the Christmas Eve session often sees increased volatility, so we could see a break above this level. The 100-day moving average capped gains over the past two days but the price is finally edging through this indicator.

On the downside the 50-hour MA has supported the price so far this week, while the 50-DMA at 6545 is also potential support.

A close above 6620 would target the 200-DMA at 6680 and then on to the November/December highs at 6750.

DAX RSI remains above 50

DAX futures are still open, and while the rally has stalled around 9900 the move higher still seems to be intact. If the index holds above 9900 then the year-end period may see a push towards the December high above 10,000.

Weakness could see a test of the 200-DMA at 9550, followed by 9420. The daily relative strength index has almost entirely flattened out but remains above the 50 level, indicating the buyers are still in control.

Concern for Dow bulls

A new high in this index brought out both the cheerleaders and the top callers, although the bulls should be concerned that the Dow Jones transportation index has yet to make new highs.

Having rallied 5.4% from its open on 17 December, the index has lost momentum as Christmas looms, but with new highs likely today a bullish stance is still the prudent option.

On the downside we look to possible support at 17,800 and then the 50-DMA at 17,452, while only a close back below the 16/17 lows around 17,110 would really indicate that the year-end is going to be disappointing. 

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