CAC 40: The pivot point of 6,760 points makes sense

(News Bulletin 247) – Below 6,760 points, which continue to be a real technical pivot point, the CAC 40, in starving volumes, nibbled 0.70% to 6,731 points on Monday, investors holding back their initiatives at a turning point of the war in Ukraine. The Russians will redeploy, in particular towards Odessa, to try to build a block of territorial continuity. Far from kyiv, therefore, while the discovery of streets strewn with the corpses of civilians, in Irpin and Boutcha has frozen the blood of the international community. The Russians will therefore redeploy their forces, in an attempt to build a block of territorial continuity around the Black Sea and the Sea of ​​Azov.

Waiting for new international sanctions against Moscow after Ukraine accused the Russian army of having committed a massacre of civilians in Boutcha, near kyiv. In response to this macabre discovery, US President Joe Biden said on Monday that he wanted a “war crimes trial”. The High Commissioner for Human Rights, Michelle Bachelet, for her part, said she was “horrified” and called “to preserve all the evidence” of these “possible war crimes” and “serious violations of the rights of the man”.

Statistically, the Sentix index plunged to -18 this month, the lowest since July 2020, even as investors tried to come to their senses after the first lockdown. As a reminder, the Sentix index of investor confidence in the European monetary union is calculated after analysis of a past survey of 2,800 representative investors and analysts, the questionnaire relating to their forecasts over a 6-month horizon. Sentix is ​​an expert firm in behavioral finance. RAS on the other hand on the monthly dynamic of orders to the American industry, emerged perfectly in the target.

Operators continued to digest rather calmly the latest US employment figures, published on Friday, of good quality, without additional signs of overheating for all that. For Thomas Giudici, co-head of bond management at AURIS Gestion, these data “confirmed the latest outings from FOMC members. Job creations once again remained sustained with a strong revision over the previous month. At the same time, the rapid rise in wages continues with a further increase of 0.4% over the month, which brings the rise to 5.6% over the year. the main point of attention, the new increase in the rate of participation in the labor market is good news because it is able to curb this runaway.

On the stock side, the star index of the Parisian market was driven by growth stocks (“Growth” files), technology and luxury in the lead. In addition to Thales, still supported by the war in Ukraine (+3.02% to 116 euros), the best performances of the day are indeed to be attributed to Dassault Systèmes and Capgemini (+2.8% each), while that Hermès and LVMH take over 2.4% and 2.2% respectively.

On the other side of the Atlantic, the main equity indices ended Monday’s session in positive territory, with a special mention for the Nasdaq Composite (+1.90% to 14,532 points), brought to a boil by the acquisition by Elon Musk of 9.2% of Twitter’s free float (+27.12% closing at $49.97).

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 $1.0970. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $104.70.

To be followed in priority, on the agenda this Tuesday, the final data of the services PMI for March in the Euro Zone at 10:00 a.m., as well as the American trade balance at 2:30 p.m. and the services PMI (ISM) at 4:00 p.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 on Thursday 02/24, 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 has thus begun. The school marubozu drawn on 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 would open under 6,000 points, already broken on Monday 07/03, before the formation of a dispute rebound. On Wednesday, March 09, we witnessed a first phase of an explosive protest rebound, which pushed the index back to its 100-hour moving average (in orange in hourly view), a curve that retains a marked downward bias. The gap on Wednesday March 16 is not a signal to return to buying, and the high volatility phase is therefore not yet over. The configuration, in the form of a combination of candles, in three black crows over the last three sessions of week 12, calls for the greatest caution. As evidenced by the harami traced immediately after a reconquest of 6,760 points, for a single closing, that of March 29.

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 6760.00 points would revive the tension in the purchase. While a break of 6500.00 points would relaunch the selling pressure.

Hourly data chart

Chart in daily data

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