Levels to watch: FTSE 100, DAX and Dow

Indices provides the potential for short-term weakness. However, with the Dow in particular heading towards a crucial support zone, the bulls could come back into play.

Wall Street
Source: Bloomberg

FTSE 100 rebounding after wedge breakdown

The FTSE 100 sold off sharply following a double top formation completed on Tuesday. That has taken us into the 76.4% retracement at 7481. The subsequent rally has provided a bearish wedge, which has now been broken.

The 7481 low is going to be crucial from here, with a move back below that level greatly increasing the chance that we will see the price move back down through 7448. As such, the outlook is somewhat mixed for now, where the respect of the Fibonacci level points towards a possible resurgence. However, the near-term wedge signals that we could see some near-term weakness. 

DAX breaking lower after ascending triangle

The DAX is breaking lower from an ascending triangle this morning, with the price breaking below the key 13,344 swing low.

A close below that level would provide greater confidence of a bearish follow through. Watch out for a break and hourly close below 13,344, or else above 13,420 to provide the basis for ongoing trade.

Dow heading back into key support zone

The Dow Jones is heading lower in early trade, with a crucial region of support likely to come into play. Should the price break below 23,470 then it would complete a head and shoulders formation, while breaking trendline and simple moving average (SMA) support. This doesn’t seem likely given the wider uptrend.

The closer we get to that 23,470 mark, the better the buying opportunity. Therefore, a bullish view is in play, unless we break and close below that 23,470 level.

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.