Levels to watch: FTSE 100, DAX and S&P 500

After a strong finish to Q3, indices are girding themselves for further gains in, what is historically, the strongest quarter of the year. 

US trader
Source: Bloomberg

FTSE 100 maintains rebound from September lows

An excellent end to the quarter saw FTSE 100 cap a stellar rally from the mid-month lows. Now, with the price opening back above the 50-day simple moving average (SMA) at 7375, we look to see if momentum can be sustained. Further targets lie at 7400 and 7450.

It would likely take a drop back below 7300 to reverse the positive outlook, with a return to all-time highs by the end of the year a possibility. Any dip that holds above 7300 should likely be perceived as a buying opportunity.

DAX’s parabolic rally pauses

The DAX barely paused for breath during September, rallying back to all-time highs, with only the 20 June peak at 12,954 now standing between it and uncharted territory.

Given the near-vertical move over the past week, some reversal would not be surprising, but anything that holds above 12,500 remains a dip to be bought. Bears will have a tough job reversing the momentum seen here in recent weeks.

S&P 500 eyes new highs in Q4

S&P 500 continue to clock up new all-time highs. Any pullback towards 2500 remains a buying opportunity.

Overbought readings in momentum indicates a sign of trend strength, rather than any immediate suggestion of a top. 

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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