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Levels to watch: FTSE 100, DAX and Dow

Indices begin to turn higher once again, with the FTSE 100 attempting to join the DAX and Dow in pushing towards the upside.

anonymous

Publication date : 2017-10-31T09:13:45+0000

DAX

Source: Bloomberg

FTSE 100 at key resistance zone

The FTSE 100 has managed to break back into a crucial area of resistance this morning, with the price pushing through the 7503 swing high. With that move, we are subsequently seeing the index reach a descending trendline, which is accompanied by the 200-hour simple moving average (SMA) of 7507, and 76.4% retracement of 7510.

The ability to break through these points of resistance will tell us a lot about the ability of the index to continue pushing upwards. An hourly close above these points would go a long way to proving that the recent downside is set to reverse. Ultimately, a break above 7520 would be the key bullish indicator to negate the recent downtrend. Until then, there is always the possibility that the trend will kick in once more.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX closes in on wedge apex

The DAX has continued to grind higher, with the index gradually moving towards the apex of its wedge pattern. That would typically be a bearish pattern, but given the strength of the underlying trend and the shallow slope of the wedge top, there is a strong chance the breakout will be bullish.

The key level to watch to the downside would be 13,218, which if broken would provide a more bearish outlook. Until then, a bullish view remains in play.

DAX chart

DAX chart

DAX chart

Dow begins to turn higher after retracement

The Dow Jones is gradually moving higher, following a near-70% retracement from the previous highs of 23,486. Ultimately, we have a clear-cut bullish trend in play, and this recent retracement looks like a good buying opportunity to get into that trend.

With that in mind, a bullish outlook remains in play, unless we see a move back below 23,251 support.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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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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