Levels to watch: FTSE 100, DAX and Dow

Another leg lower for indices points towards further selling to come, with key support levels being challenged this morning.

FTSE 100 rally falls short

The FTSE 100 managed to rally out of a symmetrical triangle formation yesterday, yet the subsequent move turned out to simply be a deep retracement, as the index continues its decline after rejecting the 7312 resistance level.

The overnight move below 7201 points towards further downside to come, with any near-term upside likely to provide a shorting opportunity, as long as the price does not break above yesterday’s peak of 7292.

DAX challenging key support level

The DAX is also selling off, with the price breaking below the crucial 12,332 support level this morning. An hourly close below there would point towards further downside for the days ahead.

The failure to create a new high points towards a head and shoulders formation being completed, which again points towards a bearish outlook going forward. A break above 12,513 would be required to negate that outlook.

Dow rally fades into sharp downturn

Yesterday’s sharp rally soon faded into significant downside for the Dow Jones, with the index breaking below the key 24,805 support level.

The steepness of yesterday’s sell-off makes it difficult to utilise the prior swing high for risk-to-reward purposes, yet retracements and bearish continuation patterns are worth watching for as potential shorting opportunities. A bearish outlook remains unless we break above 25,298.

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