CAC 40: Towards a seventh weekly green candle?

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(News Bulletin 247) – Last week, the CAC 40 index will have digested with disconcerting ease the latest US inflation figures, showing a rise in consumer prices above expectations, mechanically reinforcing the probabilities of a federal rate hike in July. In the end, a flat consolidation of the flagship index, above the symbolic threshold of 7,000 points, with the start of a bullish extension on Friday (+ 0.45% to 7,091 points).

It is once again the luxury sector that has played the locomotives. While a famous firm assures that the luxury industry should erase the effects of the Covid pandemic this year (with regard to the listed leaders of the sector it is already practically acquired given their dynamism over the first nine months), the champions LVMH (+ 2.48% to 722.9 euros), Kering (+ 2.92% to 677.8 euros) and Hermès (+ 2.60% to 1,478.50 euros) took advantage of the momentum given by Richemont, whose price rose by more than 10% in Zurich.

In the statistical chapter, to report a statistic less alarming than expected on the dynamics of industrial production in the countries of the monetary union (-0.2% monthly rate in September). Across the Atlantic, target exceeded for new job offers (JOLTS) in September, while the consumer confidence index (U-Mich) in preliminary data for the current month, has declined at 66.8, against 71.7 in October.

On the other side of the Atlantic, market psychology unchanged at the end of last week, reflected in green on all the flagship indices. The Dow Jones gained 0.50% to 36,100 points and the Nasdaq Composite 1.00% to 15,860 points. The S&P 500, the benchmark barometer of risk appetite for fund managers, rose 0.72% to 4,682 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 1,1460$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 80,00$.

To be continued on the statistical agenda this Monday, as a priority, the trade balance in the Euro Zone at 11:00 a.m., and the NY Fed’s manufacturing index at 2:30 p.m. Published overnight, the dynamics of Chinese industrial production exceeded expectations, at + 3.5% in October, at an annualized rate.

KEY GRAPHIC ELEMENTS

The CAC 40 index, a benchmark barometer, however imperfect it may be, of the Paris Stock Exchange, is regularly registering new absolute highs. After Monday’s bullish gap, a powerful “three advancing white soldiers” structure was formally validated last week. The 5 candles of the week also feature a green body: systematically, the closing exceeded the opening, whatever the opening level compared to the day before. These two observations materialize, combined with the volumes of transactions, a phase of momentum in the process of being expressed. The three shadows on the candles of 05, 08 and 09/11 show a perfectly legitimate breathlessness, but without profit taking. The bodies of said candles are otherwise green. The entry into the breathing phase of the lessons is to be anticipated.

PREVISION

With regard to 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 crossing the 7500.00 points would rekindle the purchase tension. While a break of 6960.00 points would revive the selling pressure.

Hourly data graph

CAC 40: Towards a seventh weekly green candle?  (© ProRealTime.com)

Daily data graph

CAC 40: Towards a seventh weekly green candle?  (© ProRealTime.com)

©2021 News Bulletin 247

Source: Tradingsat

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