CAC 40: Bearish gap at opening

(News Bulletin 247) – Investors are drowning under the hawkish speeches of central bankers and the bad macroeconomic news in recent hours, suggesting an opening in the bright red this morning. First of all on the macroeconomic level, while German GDP came out negative for 2023, China announced growth and industrial production figures below expectations. Additionally, China’s population declined for the second year in a row. The Chinese population has, in fact, decreased by 2 million inhabitants, according to official statistics. The 11 million deaths recorded exceeded 9 million births. Furthermore, Christopher Waller’s comments continue to weigh on global assets. Indeed, he indicated that rate cuts were not automatic, therefore assuming a plateau, longer than anticipated by the markets, on the rate curve. This information has given new strength to the dollar, which has wiped out the rebound of recent days in stocks, the euro and gold. Investors should still see volatility on their screens today, as we expect the inflation index for the euro zone at 11:00 a.m. then American retail sales at 2:30 p.m. followed at 4:00 p.m. by a speech from Christine Lagarde. On a microeconomic level, Apple is also weighing on the trend so the group is offering discounts on its iPhones in China, reducing retail prices by up to 500 yuan, or around $70. This time-limited promotion, billed as a Lunar New Year event, will run from January 18 to 21. In France we will closely monitor Renault, Esker, Fountaine Pajot and Vinci after the publication of results.

KEY GRAPHIC ELEMENTS

Technically the index should open again below the polarity of 7400 points. As long as the stock index closes daily above its ascending 50-period moving average, we can favor purchases on declines. In the event of a breakage of the latter we will become a seller to aim for a return of 7200 points. A reintegration of 7400 points would give rise to a rebound up to 7500 points.

FORECAST

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

This bullish scenario is valid as long as the CAC 40 index is above support at 7200.00 points.

Hourly graph

Daily Data Chart