Levels to watch: FTSE, DAX and Dow

The end of the week sees another bounce for indices, as the see-saw battle between buyers and sellers goes on.

Source: Bloomberg

FTSE 100 eyes 6122

Crucial to today’s trading will be the area around 6070, which has been fought over more times this week than most care to remember. The singular feature of the past five days has been that, while big swings are the order of the day, the overall impact seems to have been merely to push the index’s rangebound trading to a slightly lower level.

Buyers, it appears, are still prepared to step in when dips appear, but the sellers are putting up furious resistance, halting rallies soon after they appear.

If we can hold above 6070 then the target becomes 6122, and then on to 6183, which might then indicate that the buyers have established a temporary ascendancy. Below 6070 and we look towards 6009, 5962 and then 5898. It is possible that dip buyers will come in should we head lower, as the lows for August still remain intact.

DAX could target 9730

We have seen the beginnings of a real turnaround here in the DAX, with the index pushing back above 9640 and aiming to recover much of the ground lost earlier in the week.

Particularly noticeable is the hefty bounce in the daily RSI, which has rallied from oversold levels and rewarded brave dip buyers. However, now the hard work begins, with the next upside target lying around 9730 and then 9892.

Downside support lies around 9500 and then the week lows of 9376.

Dow could see short-term bottom

The 16,200 level remains the line in the sand here, as it has done for the past few weeks. As with the DAX, the RSI has rallied for the Dow Jones, encouraging the idea that we have seen a short-term bottom.

The test of 16,000 yesterday brought out the buyers, and now the target becomes 16,544, and then on towards 16,742. A turn lower will need to close on a daily basis below 16,200 and then through 16,000 itself to maintain the momentum.

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