Indices continue their recovery
The bounceback from Friday’s lows continues for indices, as fears about a banking crisis recede.
FTSE 100 reclaims 7500
The index rallied off the 200-day simple moving average (SMA) on Monday, having dipped below it on Friday.
Should the buyers be able to drive it back to 7600 then a higher low may well have been formed. This bolsters the bullish view and could see the price claw back more of the lost ground of the past six weeks. In that case 8000 would be an initial target.
A more bearish view requires a drop back below 7300, and then on below last week’s 7200 low.
DAX makes headway
Friday’s session saw the price rally off the 100-day SMA, and it has pushed higher on Monday too.
This continues to build a picture of a higher low, with a move above the 50-day SMA the bullish view will receive further reinforcement, and then the price can contemplate a move back to the March highs and potentially higher.
This view would be negated with a move back below the 100-day SMA, and then on below the 14,500 area that marked the low last week.
Dow pushes back to the 200-day MA
Monday’s price action saw a tentative recovery to the 200-day SMA, helping to recoup some of the recent losses.
This begins to suggest a low has been formed for the time being and that another attempt at a move higher is underway. This initially targets the 50-day SMA, and then on to the 33,500 high from the beginning of the month.
It would require a reversal below 31,500 and a close below 31,300 to suggest that the lows of the past two weeks have been conclusively broken to the downside.
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