(News Bulletin 247) – The powerful wave of clearances continues on the Paris Stock Exchange, and in the main European stock exchanges in general, while Russian troops are in position around Kiev. The CAC 40 dropped 4.97% to 661 points on Friday and is about to break the symbolic threshold of 6,000 points on Monday. Since the start of the year, the flagship Paris index has fallen sharply by more than 15%. Societe Generale, whose exposure to Russia worries investors, again lost considerable ground on Friday (-10.03% to 20.805 euros), in very high volumes.
Value files such as Alstom (-9.04% to 19.11 euros) or Veolia Environnement (-8.31% to 25.27 euros), suffered violent setbacks. Automotive, with Renault’s exposure and lower registrations, luxury, or aircraft construction with fears of supply problems for specific raw materials, were also heavily penalized. Only one title out of 40 within the CAC managed to extricate itself into green territory: Thalès (+0.80% to 107.65 euros), by the very nature of its activities, on-board electronics for defense.
New in the radius of economic sanctions, sanctions not without consequences on our own economies: Westerners are now discussing a potential boycott of Russian oil. “This decision could put a little more pressure on the US Federal Reserve regarding the tightening of its monetary policy, as Jerome Powell confirmed a hike of only 25 basis points at the next FOMC to be held next week.”, for Vincent Boy (IG France).
In terms of statistics, the NFP (Non Farm Payrolls) report, the federal monthly report on employment, highlighted job creations well above expectations (+678,000 in the non-agricultural private sector) as well as a stronger contraction albeit expected unemployment rate, at 3.8% of the active population.
On the other side of the Atlantic, the main equity indices closed Friday’s session in the red, like the Dow Jones (-0.53% to 33,614 points) or the Nasdaq Composite (-1 .66% at 13,313 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.79% to 4,328 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 $1.0890. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $125.00.
To follow in priority, on the agenda this Monday, to follow in priority, orders to German industry at 10:00 a.m. and the Sentix investor confidence index at 10:30 a.m.
KEY GRAPHIC ELEMENTS
The 6,760 points, which we have identified so far as a gradually weakened floor, gave way, on a wide gap, opening the way to a new market phase. Recall that the index traced from February 16 to 18 a combination of candles in three crows. This combination was immediately followed by a very significant bearish engulfing structure, accompanied by volumes that were far from timid for a session, let’s not forget, without American benchmarks due to a public holiday. The last phase of weakening of the aforementioned support will therefore have been aggressive. Friday 25/02’s pullback was surgically precise. A phase of high volatility begins. the marubozu of school traced Tuesday 01/03 is a first step. Second stage Friday 04/03 with a candle of the same type (opening on the high points, closing on the low points) in even more fed volumes. A new bearish leg opens below 6,000 points, before a contesting bounce forms.
FORECAST
In view of the key graphic 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 trading below the resistance at 6385.00 points.
Hourly data chart
Chart in daily data
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