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

Weakness persists across indices, although we have only seen modest losses over the past week.

Wall Street
Source: Bloomberg

FTSE 100 with a chance to rally?

The FTSE has steadily dropped back over the past week, but found support overnight at the 200-hour simple moving average (7321).

It does not yet look as if the rally is back on, but if the price moves above 7330, a bottom may be in place. A drop through 7320 would suggest a further move to 7260 and potentially lower.

DAX shows potential to bounce

A steep pullback on the DAX since the 12,100 peak shows no sign of stopping yet, although the price is trying to hold the area around 11,900. If it can bounce from here, the broader trend is still intact and might lead to a move back in the direction of 12,100.

A drop below 11,900 would head towards 11,800 and then 11,692. 

S&P 500 relying on its overbought condition

The S&P 500's 1.4% drop since last Wednesday is similar to that suffered by the index at the end of December. In both cases it has worked off its overbought condition, which raises the prospect of a turn higher.

This will need a move back above 2370. Potential areas of short-term support are 2357 and then 2350, while on the upside a move above 2370 would suggest a move back to 2400.

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