Base breakout for Dax

Are European equity markets poised for a further rally?

Last Friday, some European indices rallied to their multi-week highs. These advances broke their multi-month downtrends. In particular, the DAX Index gapped up decisively above its near-term resistance at 11,000 (see Featured Chart). This is DAX’s strongest rally in months.

For the CAC40 Index, its medium-term downtrend is too under pressure as it gapped up at 4,800 (see below). This affirms a V-shaped base pattern and prepares it for another leg up. However, there appears to be near-term resistance at 4,900-5,000.

Even the Italian FTSEMIB Index is trading at the top of its base at 19,600, gathering strength for a potential upside breakout. This follows from a failed downside breakout at 18,400.

Overall, the patterns in these equity indices are medium-term bullish. But be aware these market rallies might be short-term overbought. I would not rule out a consolidation in the days ahead, especially when economic data disappoint.

An overview of some spread betting brokers to trade Equity Indices with here.

 

Compare Vetted Investing, Trading & Currency Accounts

Investing AccountsTrading PlatformsCurrency Transfers
Compare Investment Accounts

Compare Investment Accounts

Compare Trading Platforms

Compare Trading Platforms

Compare Currency Brokers

Compare Currency Brokers

Trading Risk Warning

ALL INVESTING INVOLVES RISK. Investing, Derivatives, Spread betting and CFD trading carry a high level of risk to your capital and can result in losses that exceed your initial deposit. They may not be suitable for everyone, so please ensure that you fully understand the risks involved.
ESMA & FCA Risk Warning – “CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 68-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Capital at risk”