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Talking Points:

The CAC 40 has broken decisively lower this morning, with the Index trading down -1.31% so far for Thursday’s trading. This breakout concludes an extend range that the pair has been developing from May the 17th. Of the 40 listed CAC 40 stocks, only Vivendi is trading higher for the session (+0.30%). Top Losers for today’s trading include both Cap Gemini (-2.33) and Airbus (-2.05%).

Technically, with this morning’s breakout, the CAC 40 is again trending lower in the short term. The Index remains trading below its 10 day EMA (exponential moving average), which is found at 5,261.45. If prices continue to slide, traders may next look for support near the April 25th low at 5,158.50. In the event that the CAC 40 rebounds from today’s lows, traders should look for prices to trade back above the previously mentioned 10 day EMA. A bullish move of this nature would open the CAC 40 to potentially challenge the previous range high near 5,375.50.

CAC 40, Daily Chart with Averages

CAC 40 Breaks Range

(Created Using IG Charts)

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Sentiment totals for the CAC 40 remain net-long for Thursday. Currently IG Client Sentiment reads at +1.58 with 61.2% of traders net-long the Index. As this value remains slightly positive, it may be seen as interpreted as a bearish signal for the CAC 40. In the event that the CAC 40 continues to breakout lower, traders should watch sentiment to push up towards negative extremes of +2.0 or more. Alternatively if prices reverse and rally higher, sentiment totals may reverse and eventually flip negative.

CAC 40 Breaks Range

--- Written by Walker, Analyst for DailyFX.com

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