CAC 40: Still under bearish pressure

(News Bulletin 247) – Geopolitical tensions continue to weigh on the trend. Indeed, the successive declarations over the last 72 hours have revived investors’ concerns about seeing a widening of the conflict between Hamas and Israel extending to other countries in the region. Gold prices benefit from this geopolitical deterioration. On the other hand, on the stock side, investors are being cautious, particularly after the first publications in France disappointed investors. The latest news should not change their mood. Indeed, the chairman of the board of directors of Atos, Bertrand Meunier left his functions this weekend which could thwart the proposed sale of part of the group to Czech magnate Daniel Kretinsky. Fortunately across the Atlantic, bank publications last Friday reassured investors. This day other American financial groups must publish. The publication schedule will accelerate, with Tesla and Netflix expected on Wednesday. On the macroeconomic level, investors are awaiting today the publication of the Empire State manufacturing index from the New York Fed at 2:30 p.m. French time. When the market opens, we will closely monitor the luxury sector and German industrial stocks sensitive to China. Indeed, the Chinese central bank has intensified its liquidity injections. The People’s Bank of China injected a net 289 billion renminbi, or $39.6 billion, into the financial system, increasing interbank liquidity by the largest amount since the end of 2020.

KEY GRAPHIC ELEMENTS

Technically the index is still under bearish pressure. The last two candlesticks were made with significant selling volumes and the format of the candles indicates a weak buying presence. The correction should therefore continue towards the next support. Bounces inside the Friday candle are selling opportunities. The first signal of fragility in this bearish dynamic would be a recovery of 50% of the body of Friday’s candle.

FORECAST

Considering the key graphical factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.

This bearish scenario is valid as long as the CAC 40 index is below resistance at 7200.00 points.

Hourly graph

Daily Data Chart