(News Bulletin 247) – The CAC 40 regained 1.34% to 6,548 points on Friday, in relatively timid volumes, for a weekly balance sheet in the red (-2.04%), operators remaining on the defensive after the tone particularly firm adopted by the Fed, the new salvo of economic sanctions against Moscow, while including a political risk with the approach of the verdict of the polls. The French, called to vote yesterday for the first round of the presidential election, put E. Macron in the lead, ahead of Mr. Le Pen, as they did five years ago. On the other hand, it should be noted the collapse of the historical parties of the traditional right and left, the failure of EELV, which further fractures the French political landscape between progressives and populists. The market takes note of this, and will closely monitor the campaign between the two towers.
“We must not lose sight of the fact that the markets are judging the results of this first round in the short term, but that the world news remains dominated by the Ukrainian crisis with its repercussions on all the world markets, whether currencies, raw materials or even indices. Not to mention a still tense health situation in China, whose confinements again raise fears of an increase in logistical tensions and therefore shortages accompanied by inflationary tensions” points out Alexandre Baradez (IG France).
In terms of statistics, only the inventories of American wholesalers were on the agenda on Friday, up 2.5% in February on a monthly basis, somewhat missing expectations.
Side values, Alstom received a note from Citi and climbed 5.43% to 20.77 euros. Edenred is content with a gain of 2.36% to 47.80 euros (but this is the sixth rebound session) after raising Stifel’s target to 54 euros.
On the other side of the Atlantic, the main equity indices ended Friday’s session in mixed order, with the Dow Jones climbing 0.40% to 34,721 points and the Nasdaq Composite dropping 1.34% to 13,711 points. , against a background of chronic rise in bond yields. The S&P 500, the reference barometer of risk appetite in the eyes of fund managers, fell symbolically, by 0.27% to 4,488 points.
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 $1.0890. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $96.40.
To follow in priority, on the agenda this Monday, the speech of Bowman (member of the Board of the Fed) at 3:30 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.
the pullback of Friday 25/02 will have been of surgical precision. 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 harami traced immediately after a reconquest of 6,760 points, for a single closing, that of March 29. Note the bearish engulfing character of the weekly candle of week 14 on the candle of week 13.
Negative review offered.
FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.
This bearish scenario is valid as long as the CAC 40 index is trading below the resistance at 6760.00 points.
Hourly data chart
Chart in daily data
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