Levels to watch: FTSE, DAX and S&P 500

Stock indices are recovering across the board, but there is still work to be done to restore the bullish outlook.

Data
Source: Bloomberg

FTSE 100 could see 7300

The battle for 7130 goes on, with the level holding for now for the index. For a second day yesterday, dips below 7130 and towards 7100 brought out the buyers, so a bigger drop will require this 30-point zone of support to be firmly broken.

This would then open the way to 7050 and potentially down to the 100-day simple moving average (SMA) at 6977.

If 7130 holds then we look to the 7200 area as the first point of potential resistance, and then on to 7246 and 7300. 

DAX could drop to 11,200

Another steep sell-off yesterday has been met by buying, but already the rally appears to be petering out below the 200-hour SMA at 11,686.

A decisive rejection here could open the way to the 11,400 area where support was last found in strength, and then if this breaks the way could be clear to 11,200. A rally must get back above 11,700 and then post a close above 11,750 for the DAX.

S&P 500 eyes 2295

On Monday and Tuesday, sell-offs saw the 2267 area provide strong support, with a bounce carrying the index back above 2278. Buyers now need to fill the gap down from Monday, which suggests a move back above 2295.

If the price turns lower, it will need to post a close below 2267 to open the way to 2237 and 2218.

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