STOXX 50 : THE CORRECTION IS DUE
- The market has been registering higher highs and lows since November 2023, leading prices to a new historical high above 5,130pts. The long-term trend is therefore bullish.
- Today, the market has registered a strong failure below 5,132pts, which led prices back to their mid-term bullish trendline around 5,050.0pts.
Both EMA are stalling while the RSI has already shown a breakout to come following a long bearish divergence with the market.
- While already trading in uncharted territory, it becomes more and more difficult for investors to keep buying and defend the extremely high stock valuations everywhere.
In order to keep pushing stock higher, traders will need positive development from both the corporate front, with solid earning reports, as well as the monetary easing cycle to come.
However, the last batch of macro data from both US and the EU has shown that Economies keep expanding.
In addition, central bankers have also reaffirmed their need to see further proof that inflation rates are trending down, before proceeding with any rate cuts.
With that in mind, we believe a correction is now due for the pan-european index.
Support levels can be found towards 5000pts, 4863pts, 4695pts and 4560/4570pts by extension.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
- Today, the market has registered a strong failure below 5,132pts, which led prices back to their mid-term bullish trendline around 5,050.0pts.
Both EMA are stalling while the RSI has already shown a breakout to come following a long bearish divergence with the market.
- While already trading in uncharted territory, it becomes more and more difficult for investors to keep buying and defend the extremely high stock valuations everywhere.
In order to keep pushing stock higher, traders will need positive development from both the corporate front, with solid earning reports, as well as the monetary easing cycle to come.
However, the last batch of macro data from both US and the EU has shown that Economies keep expanding.
In addition, central bankers have also reaffirmed their need to see further proof that inflation rates are trending down, before proceeding with any rate cuts.
With that in mind, we believe a correction is now due for the pan-european index.
Support levels can be found towards 5000pts, 4863pts, 4695pts and 4560/4570pts by extension.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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