Levels to watch: FTSE, DAX and Dow

The US is still the market to follow, with a very clear trend in place for the Dow. Meanwhile, European markets provide a poor man’s version of those in the US, with more choppy price action of late.

Glasses data
Source: Bloomberg

FTSE bouncing from trendline support

The FTSE is moving higher once more this morning, following a selloff into trendline support. The 100-hour simple moving average has accompanied the ascending trendline to give the index another leg higher.

While the trend appears to be slowing down somewhat this week, we remain within an uptrend and, as long as 7269 remains intact, another leg higher seems likely. 

DAX selloff poses questions

The DAX broke below the important 11,749 support level yesterday, raising the possibility of a period of weakness for the index. That said, with the price rallying into the 76.4% retracement, we are at a point which holds interest for both bulls and bears.

Those expecting a selloff will perceive this as a good selling opportunity. Although given the recent strength, it is not sure that we will see the sellers come in here. As such, it makes sense to see how price responds to this 11,818-11,848 region. A break back above 11,848 would provide a renewed bullish outlook. However, a rejection of this 76.4% retracement could provide us with a period of weakness for the index.

Dow uptrend shows no signs of stopping

The Dow has pushed to yet another all-time high overnight, with the price currently within a very shallow retracement of 23.6%. Should that represent the total retracement, a break back through 20,654 would provide us with a good buy signal, with a small stop below the 20,618 level.

Alternately, a continued move lower would simply represent a buying opportunity for the index, with a bullish outlook remaining in place unless there is a price break below 20,498.

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 IG 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 writer