Talking Points:
- CAC 40 Retraces From New Highs
- Sentiment Figures Remain Extreme; IG Client Sentiment Totals at -3.61
- Looking for additional trade ideas for equities markets? Read our 2017 Market Forecast
The CAC 40 has backed off from yesterday’s highs, and has now opened lower for Tuesday’s trading (-0.01%). European markets as a whole are mixed, as stock indices are now looking to Mario Draghi’s in Frankfurt later today for further direction. Top Winners for the CAC 40 include Vivendi (+1.73%) and Total (+1.02%). Top Losers for the CAC 40 currently include Societe Generale (-1.77%) and Peugeot (-1.61%).
Technically the CAC 40 is trading just off of new 2017 highs at 5,100.30. This new high was put in place earlier yesterday, and now the pair is finding support above its 10 day EMA (exponential moving average) at 5,073.79. It should be noted that the CAC 40 has not closed below this line for the last 7 trading sessions. While prices currently remain supported, if prices break below this value later in the session it should be seen as technically significant. A bearish breakout here, would suggest a change in the CAC 40’s short term trend and open the Index to trade towards new lower lows.
CAC 40, Daily Chart with Averages
Current market sentiment for the CAC 40 (Ticker: France 40) remains extreme, with IG Client Sentiment reading at -3.61. This reading indicates that 21.7% of traders are currently net long the Index. This is a small change from last week’s reading of -4.5. Typically sentment is read as contrarian indicator, and current extremes suggest that the Index may continue to trade higher. In the event of a market reversal and a breakdown in price, traders should look for sentiment figures to continue to decline back towards more neutral values. However if the CAC 40 continues to trade towards new highs, it is likely that IG Client Sentiment totals will remain extreme for another week of trading.
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--- Written by Walker, Analyst for DailyFX.com
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