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CAC 40 Daily Breakout

CAC 40 Daily Breakout

2016-04-01 13:50:00
Walker England, Forex Trading Instructor
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Talking Points

  • The CAC 40 Trades Down -2.47%
  • Price has Broken Daily Support at 4,305
  • SSI Reads Bearish at +1.88

CAC 40 Daily Chart

CAC 40 Daily Breakout

(Created using Marketscope 2.0 Charts)

What is next for the equities market? Click HERE for our analysts Free forecast!

The CAC 40 is currently trading down -2.47% today, with the index looking to close lower for the third consecutive week. Today’s CAC 40 selloff has been paired with a general decline in European equities market, with both the DAX and FTSE 100 also trading lower. Out of the 40 listed stocks on the CAC, ACOR is leading the decline trading down -3.30%. Currently only two components of the Index are trading higher, with ArcelorMittal trading up 7.45%.

Technical traders will note that the Index is currently trading beneath the ECB low of 4,305 posted on March 10. Bearish breakouts over the last two sessions have pushed the CAC 40 to trade to new lows for the first time in 14 trading days. This breakout may suggest that consolidation for the Index has as at least temporarily concluded and may also suggest a move towards further declines. With the previous range measuring 277.50 points, trader may extrapolate a 1X range extension to place preliminary bearish targets near 4, 0275. In the event that prices reverse and close back over 4,305, it would suggest that today’s movement was a false breakout. In this alternative environment, traders may potentially look for prices to again challenge previous resistance at 4,582.50.

SSI (speculative sentiment index) for the CAC 40 (Ticker: FRA40) is reading at +1.88. This value remains positive, and has increased from yesterday’s reading of +1.73. In the event that prices continue to decline, traders should look for SSI readings to continue reading higher. Conversely, in the event of a bullish reversal, traders should look for SSI to decline back towards more neutral values.

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