FTSE 100, DAX and Dow rally towards crucial resistance levels
FTSE 100, DAX and Dow surge higher, yet questions remain given recent consolidation zone.
FTSE 100 rallies through key resistance
The FTSE 100 has managed to surge higher after last weeks failed attempt to break from this uptrend. The rise through 6010 brings about a fresh higher high, thus raising the likelihood of a break back into the April peak of 6211.
While we could see further upside, it is worth noting that risks still remain given that much of this upside is driven by the same short-term jubilance that came with the Gilead coronavirus treatment. Such a boost can only last so long, and thus there is a chance we could continue this period of consolidation.
With that in mind, a break back below 6031 and a drop below 80 on the stochastic could provide a more bearish outlook. Until then, the short-term picture remains bullish given the recent surge.
DAX pullback respects previous peak
The DAX is surging higher once again this morning, with the index rising through 11,035 resistance and respecting that breakout level as new support today. That points towards further upside as long as we remain above that 11,035 support level.
To the upside, the major resistance level we need to break comes in the form of 11,342. If that happens, we would be looking at an exit of the consolidation that has dominated since early April. However, the same caveat has applied given the consolidation in play over almost two months.
As such, there is a possibility of the bears coming back into play if the price breaks back below 11,035 and the stochastic breaks below 80. Until then, the bullish short-term trend remains in play.
Dow Jones rallies into key resistance
The Dow Jones has also seen substantial gains since the lows of last week, with the index rising back into the 24,903 level. A break through that point would signal a potential bullish breakout after a month of consolidation.
Nevertheless, given the proximity to that level it could make sense to await such a break first. Until then, there is a chance of a pullback if the stochastic drops below 80 and the price breaks 24,480 support.
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