CAC 40: The threshold of 8,000 points, a powerful magnet

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Driven by company results, the CAC40 (+0.86%) reached new zeniths (7,743 points at closing on Friday), causing a resistance zone to give way at 7,700. The path towards the highly symbolic and psychological threshold of 8,000 points is now open, while the market has fully digested the scenario of a first rate cut, both American and European, later in the year.

After Michelin, which shone earlier in the week, it was the turn of Renault (+6.53%) and Stellantis (+5.78%) to delight the financial community after the unveiling of their quarterly accounts (and mechanically annual).

The diamond group published a record operating margin and cash flow, reminding the market that its fundamentals remain solid.

Accustomed to publishing solid results, the group led by Carlos Tavares once again overtook analysts, with a slightly better margin than expected and, above all, impressive cash generation. The group will return 7.7 billion euros of cash to its shareholders in the form of dividends or share buybacks.

At 2:30 p.m. Thursday, a slew of major statistics were on the agenda. Here are those which deviated the most from the target: these are retail sales, which were disappointing in January, down 0.6% monthly. As well as the Philly Fed manufacturing index, which is coming out of its red zone, at 5.2 points, the highest since last August. Weekly registrations for unemployment benefits remain as close as possible to the 200,000 new unit mark.

On the other side of the Atlantic, the main equity indices ended Thursday’s session in the green, like the Dow Jones (+0.91% to 38,773 points) or the Nasdaq Composite (+0 .30% at 15,906 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, increased by 0.58%, around thirty points above the highly psychological threshold of 8,000 points.

An update on other risky asset classes: around 8:00 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0760. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $77.60.

On the agenda this Friday, to follow as a priority across the Atlantic, the producer price indices at 2:30 p.m., and consumer sentiment (U-Mich, preliminary data) at 4:00 p.m.

KEY GRAPHIC ELEMENTS

The index has crossed 7,700 points and is entering an unexplored navigation zone between 7,700 and the symbolic threshold of 8,000 points. The oscillatory RSI (relative strength index) is recovering, suggesting a final bullish surge before consolidation that can be broken down into several legs.

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 7695.00 points.

Hourly graph

Daily Data Chart