Technicals

European Stocks Find Support, Look to Retest Swing Highs

WEEKLY STRATEGY

FTSE 100 Pivot Table

DAX 30 Pivot Table

CAC 40 Pivot Table

FTSE 100

Long-term Technical Outlook

The FTSE has reached the 100% extension of the 3461-4521 rally (5156).  Parallel channel resistance at this level reinforces this level and increases the risk of a top and reversal.  5339 would be the next level of potential resistance.

Short-Term Technical Outlook

The FTSE continues to re-test 5231.19, a level initially marked by the bottom of a rising channel that had contained prices since August. A turn lower from here sees initial support at 5084.66, the 23.6% Fibonacci retracement level.

DAX

Long-term Technical Outlook

The DAX has yet to reach its measured resistance point of 6113, which is where the 2 bull legs from the March low would be equal.  Potential resistance prior to that point is 5870 (50% of decline from 8152).  The mentioned 6113 is reinforced by 6168 (former support line in gray).

Short-Term Technical Outlook

The German benchmark index continues to look for direction between the latest swing top at 58185 and the 23.6% Fibonacci retracement level at 57296. A break lower will see support at 56752, the 38.2% Fib.

CAC 40

Long-term Technical Outlook

Similar to the DAX, the CAC 40 has yet to reach its measured resistance point of 6113, which is where the 2 bull legs from the March low would be equal.  However, price is close and potential parallel channel resistance reiforces the current area as one that may provide the supply required to produce a reversal.

Short-Term Technical Outlook

French issues have turned lower following a re-test of support-turned-resistance at a rising trend line that had guided shares higher since mid-August. A reversal lower from current levels eyes the 23.6% Fib at 3749.57.

IBEX 35

Long-term Technical Outlook

The IBEX has reached the January 2008 low.  Former support is now resistance.  RSI divergence warns of a trend change as well.  Watch the trendline and top channel line as potential end points for the rally in the event that the advance continues.  1247 (100% extension) is also a level to expect a reversal if reached.

Short-Term Technical Outlook

Spanish shares continue to consolidate between 1193.82, the previous swing high, and the 23.6% Fibonacci retracement level at 1160.77. A series of lower highs hints at a bearish bias, with a break below immediate support eyeing the 38.2% Fib at 1140.32.

S&P/MIB

Long-term Technical Outlook

The FTSE/MIB index encounters resistance from channel midline.  Additional levels to watch are 24916 to 26464.  The 100% extension of the 12332-20702 rally is near the top of this range.

Short-Term Technical Outlook

The FTSE/MIB has rebounded from initial support at 23842.96, the 23.6% Fibonacci retracement level, looking to take out the previous swing high at 24256.28. This will open the door for a move to challenge 24507.21, the top of a rising channel that has guided trading since early September.