Levels to watch: FTSE, DAX and Dow

Despite further weakness yesterday, there are signs that we could see the indices pick up somewhat today, with the FTSE, DAX and Dow all respecting key support levels.

DAX trader
Source: Bloomberg

FTSE stays above key support

The FTSE is rebounding from the key 7091 support level this morning, following another leg lower yesterday. That support level is going to be crucial in determining how the forthcoming weeks are going to look.

Essentially, we are looking for either an hourly close below 7091 for a bearish signal, or an hourly close above 7152 for a sign that we are heading for a rebound.

DAX attempting to regain ground from Fib support

The DAX has been consolidating around the 76.4% retracement over the past 48 hours, as we seek to ascertain whether the market is going to bottom out before rallying once more.

Interestingly, we saw last week’s low of 12,041 provide support overnight, thus giving us a curious resistance level to watch this morning (12,041). As long as we remain above 11,850, it looks likely that we will see a rebound for this market. Over the short term, a break back above 12,041 would provide us with a small double bottom and likely push higher.  

Dow looks set for short term rebound

The Dow Jones has sold off into a new low yesterday, following yet another lower high. This has formed a falling wedge, which is typically a bullish pattern. With that in mind, there is a good chance we could rebound back towards the higher end of this pattern.

The envelope used below seems to have picked up the bullish reversal points well and, given the brief foray below that indicator, there is reason to believe we will see the price reverse following a drop to extremes. As such, while we could see further downside in line with the continued creation of lower highs and lower lows, the current picture looks likely to spark a rally towards the 20,515 region.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by analysts