CAC 40: The gap of December 19 is filled

(News Bulletin 247) – The Paris Stock Exchange ends a shortened week on a good note. The CAC 40 rose 1% to 7,355.37 points this Friday, December 27.

Volumes were quite low during this session wedged between the confectioners’ truce – the Paris Stock Exchange was closed on December 25 and December 26 – and the weekend before the New Year. Over the week as a whole, the Parisian index rose 1.11%.

The progression of the Parisian index this Friday took place without the support of Wall Street. Shortly before the European close, the S&P 500 fell sharply, losing 1.3%. The American market is weighed down by the decline of its largest capitalizations, Nvidia losing 2.45%, Apple 1.8%, Microsoft 2%, Alphabet 2%, Tesla 3.5% and Meta 1.5%.

Profit-taking may have occurred on these “Magnificent Seven” of Wall Street, who are still having an incredible year in 2024 on the stock market, significantly outperforming the large European groups.

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A cheap CAC 40 To return to the CAC 40, its progression has not been fueled by any catalyst, the news proving to be sparse.

The only “advantage” that the Parisian market has: it has significantly underperformed its major counterparts and is therefore cheap. This can potentially encourage investors to position themselves at the end of the year.

“The CAC 40 is not expensive and has a good dividend yield (around 3%). As it has underperformed the American market and other European indices, I don’t think it can collapse But it is not about to rebound strongly either,” Alexandre Baradez, head of market analysis at IG France, explained to News Bulletin 247 on Tuesday.

“Investors are expecting additional guarantees from China and the French government,” he continued.

On the value side, there were no major movements on the CAC 40. The banks behaved well, Crédit Agricole SA gained 2.4%, the largest increase in the CAC 40, BNP Paribas gained 1 .7% and Société Générale gained 1.1%.

KEY GRAPHIC ELEMENTS

Here are the technical elements that we proposed on Friday.

“Technically the Parisian index is neutral in the short term. It remains stuck below its bearish gap and below its moving average at 20 daily periods. These two technical levels must be resumed at the close to see a graphical improvement. As long as the index remains under these two technical elements the index could come back to test the polarity of 7200 points again in the short term.”

All that is missing is the volumes to fully validate this movement.

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 7465.00 points would revive the buying tension. While a break of 7200.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart