CAC 40: A breath of fresh air with the Russia-USA summit project

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(News Bulletin 247) – The flagship French index, the CAC 40 (-0.25% to 6,929 points on Friday) formally plotted in the second half of last week, a combination of so-called three-crow candles, further degrading the configuration in bevel exit (see below in the technical part). The tensions between NATO and Russia, combined with the prospect of a tightening of monetary policies on both sides of the Atlantic, will have weighed heavily on the morale of operators. An opening in the green is nevertheless looming this Monday, with the agreement in principle of a meeting between J. Biden and V. Poutine, in the form of a summit at the initiative of E. Macron.

Tossed about according to geopolitical events, the Parisian dimension was also driven by the annual results, including those of Renault (-0.04% to 36.325 euros), Hermès (-4.14% to 1,203 euros) and Teleperformance (+ 4.89% to 330.40 euros).

On the other side of the Atlantic, the main equity indices ended Friday’s session in the red, like the Dow Jones (-0.68% to 34,079 points) or the Nasdaq Composite (-1 .23% at 13,548 points). The S&P 500, benchmark barometer of risk appetite in the eyes of fund managers, lost 0.72% to 4,348 points.

A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.1370. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $91.20.

To follow in priority, on the agenda this Monday, a battery of PMI activity indicators, in flash data for the current month, for services as for industry. Synthetic data for the entire Euro Zone will be released at 10:00 am.

Note that Wall Street will be closed on Monday due to a holiday (Commemoration of the birth of George Washington).

KEY GRAPHIC ELEMENTS

An oblique line of support gave way on Monday 02/14 under the sectorally federated assaults of the selling side, in a very high level of participation. This release of selling energy at this stage, in a single session (24/01), constitutes a major technical fact which characterizes the hypersensitivity of a market which is increasingly and continuously questioning the levels of valuation of the shares. . The entry into the bear market is not formally characterized, but the situation calls for the greatest vigilance under this slant. She was reinstated at the very end of the week. We put her under close surveillance. In the immediate future, plotting a wedge in hourly data is not very engaging. The three-color flagship index came out on Thursday, from below, in accelerating volumes, before starting to rise again. A definitive exit from the bottom of this bevel is the preferred option. The break, on a very wide gap on Monday, is a first decisive step. This gap was almost completely filled on Tuesday, in the form of a school pullback.

The index has plotted a combination of candles in three crows*. The looming scenario is now that of a new test of 6,760 points, an increasingly fragile technical floor.

* All 3 candlesticks close at or near their lows AND each open must be inside the body of the previous candle.

FORECAST

In view of the key graphic factors that we have identified, our opinion is neutral on the CAC 40 index in the short term.

We will take care to note that a crossing of 7036.00 points would revive the tension in the purchase. While a break of 6884.00 points would relaunch the selling pressure.

Hourly data chart

CAC 40: A breath of fresh air with the Russia-USA summit project (©ProRealTime.com)

Chart in daily data

CAC 40: A breath of fresh air with the Russia-USA summit project (©ProRealTime.com)

©2022 News Bulletin 247

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