CAC40 Draws Closer to Triangle Resistance
- The CAC40 rallies in an ascending triangle
- Point and figure resistance is found at 5,185
- A 3-box reversal would represent continued consolidation
(Created using TradingView Charts)
The CAC40 (FRA40) is breaking out to new November highs this morning and can now be seen attempting to challenge the psychological 5000 pricing level. The CAC40’s current advance is well represented in the point and figure graph above, which began after a 3-box reversal from the displayed August 2015 lows . While the Index continues to push towards higher highs, it should be noted that the CAC40s’ current rally is part of a broader ascending triangle pattern. Support has been created by connecting a series of points, including the August 2015 lows, to create an ascending trend line. Resistance has alternatively been created by connecting a series of highs on the point and figure chart at 5,185. As price draws closer to resistance, traders can begin to use these values to plan for potential trading opportunities.
In the event that the CAC40 continues to rally towards resistance, there are two distinct opportunities available for traders. First, traders looking for a breakout will wait for price to plot a new bullish box above resistance; this will allow traders to enter the market on the creation of a new 2015 high. Conversely, if prices fail to breakout, traders may select to trade the continued consolidation of the Index. This would be represented by a new 3-box reversal on a point and figure chart. After a price rejection at resistance and a new bearish plot would be significant as it would allow traders to begin targeting values along the previously mentioned ascending trend line.
To Receive Walkers’ analysis directly via email, please SIGN UP HERE
See Walker’s most recent articles at his Bio Page.
Do you know the biggest mistake traders make? More importantly, do you know how to overcome the biggest mistake? Read page 8 of the Traits of Successful Traders Guide to find out [free registration required].
Contact and Follow Walker on Twitter @WEnglandFX.
Video Lessons || Free Forex Training
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.