Wednesday, May 5, 2010

EUROPEAN EQUITY INDEX TECHNICALS More Downside In Store For European Equities

LONDON -- Rolling 24-hour chart levels:
Index Futures:    FTSE 100   E-STOXX    DAX        CAC 40 
Jun        Jun        Jun        May 
Previous Close    5389.5     2664.0     6033.0     3640.5 
3 Day Trend       Bearish    Bearish    Bearish    Bearish 
Weekly Trend      Bearish    Bearish    Bearish    Bearish 
3rd Resistance    5512.0     2743.0     6134.5     3725.0 
2nd Resistance    5453.0     2729.0     6107.0     3700.0 
1st Resistance    5425.5     2697.0     6078.0     3689.0 
Pivot*            5420.0     2691.0     6079.0     3678.5 
1st Support       5340.0     2641.0     5997.5     3617.0 
2nd Support       5322.5     2604.0     5917.5     3584.0 
3rd Support       5268.0     2554.0     5870.0     3528.0

Intraday FTSE 100: Tuesday's weakness puts near-term bears firmly in control following the push into fresh two-month lows below 5453.0, and is closing in on a downside projected target at 5340.0. However, there is scope for the significant support cluster between 5268.0 and 5271.5, which is likely to provide a floor for this current decline. This cluster incorporates 61.8% retracement of the dominant 4947.0/5796.5 advance. Only successfully protecting the 5340.0 level would provide a signal of waning bear momentum and improve near-term prospects.

Weekly chart FTSE 100 trend: Bearish.

Intraday EURO STOXX 50: Tuesday's setback into fresh two-month lows below 2686.0 leaves a lower high at 2788.0, and the stage is set for further weakness to the Feb. 25 higher low at 2604.0. This weakness upgrades the decline off the mid-April reaction high at 2956.0, and creates downside scope for congested support at 2554.0 initially. However, an equality target lies at 2518.0, close to bear channel support at 2509.0 for this week. Above 2743.0 is required to question the dominant bear tone.

Weekly chart EURO STOXX 50 trend: Bearish.

Intraday DAX 30: Bears extend their short-term dominance following Tuesday's break below 6032.5, and pressure is building on the 6000.0 level. The downtrend is expected to extend below there to expose the March 22 higher low at 5917.5, but scope exists for the more significant support area around 5870.0. This latter level also represents 50% retracement of the dominant 5400.0/6347.0 advance, and is likely to provide a floor for this current setback. Only above 6107.0 would provide respite.

Weekly chart DAX 30 trend: Bearish.

Intraday CAC 40: Tuesday's setback extends the sharp short-term downtrend into fresh contract lows below 3674.5, and more weakness is due to test the 3584.0 area. However, downside projections off Monday's lower high at 3792.0 suggest there is scope for weakness to the early February higher low at 3528.0 on the weekly continuation chart. Congested support between 3499.0 and 3505.0 lie close below there. Only regaining ground above 3700.0 would provide near-term relief.

Weekly chart CAC 40 trend: Bearish.

* The pivot is the sum of the high, low and close divided by 3.

For more technical analysis see: Dow Jon



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