CAC 40: Will the 7,200 points, harassed, give in?

(News Bulletin 247) – This article, with open access, is produced by the stock market analysis and strategy research team at News Bulletin 247. To ensure you don’t miss any opportunities, consult all the analyzes and discover our portfolios by accessing our Privileges area.

Worried by the further rise in geopolitical tensions between Russia and the West, European markets once again lost ground on Wednesday. If the DAX managed to limit the damage to the 19,000 points, the CAC 40 (-0.43%) further weakened the floor, now rotten, of 7,200 points.

Geopolitical risk has come back to the fore since the signing of a Russian presidential decree authorizing the expansion of the conditions for the use of atomic weapons. Quoted by AFP, Dmitri Peskov, Kremlin spokesperson, considered that this decision was “necessary” in the face of “threats” from the West. Russia’s move comes two days after the Biden administration gave Ukraine a boost, allowing it to strike Russian soil with US long-range missiles. And after, according to the Russian military, Ukraine launched six tactical missiles into Russian territory. Five were destroyed and the last was damaged by Russian anti-aircraft defense. AFP confirmed the strike with a Ukrainian official on condition of anonymity.

Note that the initiatives were limited, in view of the volumes, before the quarterly publication of NVidia, after the close of Wall Street. The firm specializing in chips with very high computing capacity, whose demand is exploding in light of the rise of AI, has nevertheless exceeded analysts’ expectations, but without enthusing Wall Street. In post-session trading, the stock dropped a little more than 2%. The action of the Shepherd’s Star of the markets will naturally be scrutinized at the opening this Thursday.

“Nvidia plays a crucial role in stock indexes, accounting for a quarter of the S&P 500’s gains in 2024, underscoring its major market influence. Its dominance in the AI ​​sector and exceptional performance place the company at the center of the attention of investors, making fluctuations in its stock particularly sensitive,” explains John Plassard, investment advisor at Mirabaud.

Once again since the start of the week, very little to get your teeth into on the macroeconomic side on Wednesday. The agenda is getting denser from today with, across the Atlantic, weekly registrations for unemployment benefits, the “Philly Fed” and sales of old homes.

On the values ​​side, Edenred signed the best performance of the CAC 40, gaining 2% thanks to Jefferies which raised its advice to “keep” against “underperformance” previously. STMicroelectronics fell 1.2% after announcing a three-year delay in its $20 billion revenue target. The group now plans to reach it in 2030 and no longer in 2027. Excluding CAC 40, Elior plunged by 24.3%, penalized by chilly prospects for its 2024-2025 financial year. FDJ lost 4.4%, after Crédit Agricole Assurances sold 2.2% of its capital at a price of 36.6 euros per share, a discount of around 7% compared to Tuesday’s closing price. .

On the other side of the Atlantic, the main equity indices ended in mixed order, against a backdrop of wait-and-see, like the Dow Jones (+0.32%) and the Nasdaq Composite (-0.11). %). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, ended up in perfect balance at 5,917 points.

An update on other risky asset classes: around 8 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0540. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $69.00.

KEY GRAPHIC ELEMENTS

With a candle with a long red body on Tuesday, November 12, the index defined the amplitude of a new working base, between 7,200 points on the one hand and 7,340 points on the other hand, which we switch to chart resistance zone. The thick volumes of this key session, combined with the opening gap, give meaning to the threshold break.

The 7,200 points constitute an increasingly fragile harassed floor.

FORECAST

Considering the key graphical 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 crossing 7340.00 points would revive the buying tension. While a break of 7000.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart