Levels to watch: FTSE, DAX and Dow

European and US indices have been moving lower in recent days, yet with clear uptrend in place, this could provide a buying opportunity.

Chart
Source: Bloomberg

FTSE falls back into 76.4%

The FTSE managed to rally from the 76.4% Fibonacci retracement yesterday. However, on the hourly chart it is clear that we have still been creating lower highs, and this has come back to haunt the FTSE, with trendline resistance holding once more to drag the market lower at the open.

With the price having dropped below yesterday’s low, the short-term downtrend remains in place. However, until we see a break below the 7377 mark, this still looks like we could reverse higher given the wider uptrend and this week’s break through 7552.

DAX approaches key Fibonacci support

The DAX looks to be heading lower this morning, following a period of consolidation overnight. However, there is reason to believe that this weakness will be shortlived, given the push through 12,923 on Tuesday.

However, with the price having broken to a lower low before that, there is a somewhat mixed picture in play here. Nevertheless, with the wider uptrend, coupled with the fact that you can get a good risk to reward, it makes sense to look for longs around the 76.4% level (12696). A break below 12,617 would negate this.

Dow hits trendline support

The Dow Jones has pulled back from its uptrend this week, with the price having moved into trendline support overnight. There is no doubt that we are looking at a highly trending market, and as such the expectation is for that trend to continue. For that to occur, we would need another move higher rather than a break below 21,306.

Whether this trendline holds or not remains to be seen, yet with the 61.8% retracement also joining the trendline, this looks like an interesting area for longs.

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.