CAC 40: The rebound continues

(News Bulletin 247) – Operators are once again attacking recent peaks on the indices while the luxury and semi-conductor sectors are driving the trend. Indeed, the Swiss group Richemont reported data higher than expected during its last publication and in particular good figures from China which sparked a strong rebound in the European compartment, very heavily weighted within the Cac40. Furthermore, Taiwan Semiconductor Manufacturing beat the consensus in its latest publication, causing European semiconductor stocks to jump. New results publications should liven up the day session. In France, we will closely follow Focus Entertainment, SergeFerrari and Biosynex. Concerning the macroeconomic aspect, operators continue to believe in a first rate cut for the Fed in March while speeches and discussions suggest that the European Central Bank would see June as the right timing to begin its rate cut. Investors continue to be reassured by the latest macroeconomic information. Early today, core inflation in Japan slowed for the second straight month, reducing pressure on the Bank of Japan to lift its negative interest rate policy next week. A positive point for other Western economies which want to see a continued decline in inflation. Be careful, however, on the geopolitical level, tensions continue in the Middle East, in particular with the United States which carried out a fifth series of strikes against the Houthi militants supported by Iran. Indeed, the Houthis continue to harass commercial and military ships that use the strait near their maritime space. The harassment comes even as the US and UK launched a coordinated attack on Houthi targets in Yemen last week. The reports favor the dollar and gold amid growing tensions.

KEY GRAPHIC ELEMENTS

The Parisian index is rising again with multiple buying candlesticks in recent days signaling underlying buying pressure. As long as the index resumes its 50-period daily moving average upwards again, the rebound should continue and initially reach the 20-period moving average and then the next resistance zone of 7,600 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 7406.00 points.

Hourly graph

Daily Data Chart