CAC 40: The risks of reflux will gradually appear

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(News Bulletin 247) – With the exception of the dojis of October 27 and November 10, the candles traced by the CAC 40, in daily data, all have a green body (or white, it depends) since October 20. Namely that during the same session, systematically, the closing level is above, and often largely, the opening level, even if this opening level is lower compared to the closing of the day before. This rally was not questioned yesterday, the flagship index gaining 0.34% to 7,152 points, new absolute highs, with the support of luxury. L’Oreal gained 0.74% to 7,152 points, LVMH 1.23% to 729.70 euros, Hermès 2.40% to 1,536 points and Kering, on the highest market of the podium, 4.36% to 711.20 euros.

For the moment, nor the lingering fears around inflation (the Governor of the Bank of England Andrew Bailey admitted on Monday that the level reached in September, + 3.1% over one year in the United Kingdom, made it ” very uncomfortable “, and did not rule out a rate hike in December) nor the new outbreaks of the coronavirus epidemic are hampering the forward march of the Paris market, fueled by the remarkable content of the quarterly publications and corporate optimism about the outlook.

In terms of statistics, retail sales in the United States for the month of October were published by the Census Bureau. Excluding automobiles, these sales jumped at a monthly rate of 1.7%, largely beating the consensus (+ 1.0%) and making us forget a dull month of September. An indicator with a strong stock market impact in an economy where traditionally, the bulk of national wealth creation comes from domestic consumption.

On the other side of the Atlantic, same market psychology, leading to the same results: modest but steady gains. The Dow Jones gathered 0.15% to 36,142 points, and the Nasdaq Composite 0.76% to 15,973 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.39% to 4,700 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 1,1300$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 80,20$.

To be kept on the statistical agenda this Wednesday, as a priority, the consumer price index in the Euro Zone at 11:00 a.m., in final data for the month of October, and for the United States, housing starts and building permits at 2:30 p.m. as well as crude stocks at 4:30 p.m.

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 the bullish gap on Monday 01/11, a powerful structure of “three white soldiers advancing” has been validated. The 5 candles of the week in question also display a green body: systematically, the closing has exceeded the opening, whatever the level of opening 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: The risks of reflux will gradually appear (© ProRealTime.com)

Daily data graph

CAC 40: The risks of reflux will gradually appear (© ProRealTime.com)

©2021 News Bulletin 247

Source: Tradingsat

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