Predicting next pattern I expect this pattern on CAC40 in the next weeks.
Range :
: resistance level
: Major support level
FRA40 trade ideas
F40 to Break 7000Yesterday was quite turbulent for all equity markets. In this market, the F40 , Buyers defended just above the 7000 level. Surely this is cheap and a great time to buy.
There is a significant area of Daily Support at 7070. It has on many occasions in the past.
Volume yesterday was Ultra High , reflecting the fight between the sell and buy side.
No real clear winner.
Look at today on very little volume, price again ebbs lower.
The real Demand area lies at 6800.
It is possible for the buy side to be consumed and present support to break , and expose
the Demand below. This is the near- term Target.
CAC40 setting Support to Continue Climbing Regardless of low earnings that have been reported this month investors’ sentiment on future rate cut is still high.
The index is retesting support level and have reached the 13% gap needed to start forming a reverse trend and becoming weeks.
This is strictly not a financial advice, but rather an idea. You should always make your own financial decisions before investing or taking any financial decision.
FRA 40 builds one of the most potent trading patternThe French Stock Market Index is currently trading sideways between 7457 and 7750, forming a rectangle pattern, a reliable chart pattern for traders. A break above the upper limit at 7750 suggests a potential price increase of about 3.73%, reaching 8042. This target is calculated by taking the difference between the rectangle's minimum and high points. Conversely, a break below the lower end of this range could see the index dip to 7159.
It's important to note that the overall market is in a bullish trend, with the January 2024 low around 7284 providing additional support. While a bearish break could drive the market lower, influenced by recent corrections in US stock market indices, the prevailing bullish bias means investors are generally inclined to buy rather than aggressively short on bearish breakouts, unless recession fears loom.
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FRA40 Short Setup: Key Levels Near 7732/49 on 4-Hour Chart
Monthly TF: Last month's ICMARKETS:F40 price action showed a strong bearish continuation bar, suggesting downward potential despite the overall bullish monthly trend. We're currently in a phase 2 pullback, which means short positions can be considered until the downside move concludes.
Weekly TF: The weekly chart presents a more complex picture, with over four weeks of bearish sideways ranging bars. There have been rejections from the bottom, hinting the monthly downward move might be nearing its end. However, the last two weeks' price action, despite being low tests, hasn't really achieved anything that might suggest or confirm the downward move has come to an end.
Daily TF: On the daily chart, FRA40 has been ranging for the past few weeks. By combining the monthly (down/pullback) and weekly (bearish sideways) biases, it seems prudent to take a short position from the top of the range towards the bottom.
For the 4-hour chart, we will enter a short position with a Sell Limit around 7732.64/7749.48 . We'll place our Stop Loss above 7760.00 to manage risk, and our Take Profit will be the range's low around 7498.00 .
High-Risk, High-Reward Setup for CAC 40 Ahead of French ElectionFear is spreading, and while uncertainty is problematic, the most likely scenario involves a hung French parliament leading to less aggressive fiscal spending, as the EU will likely step in and impose sanctions on France. Additionally, the market is already offloading French government bonds, and France could face the market's wrath, similar to the UK during Liz Truss's brief tenure.
If normality returns, then the CAC 40 should soar, provided it trades above the January low of 7279.
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Simple but efficient analysisWe are bellow (but near) 7700$ ; which is the 200 day EMA.
It is difficult to predict the direction at this price level as 2 scenarios are presented :
- If the market breaks this level with high volume , big green candle , and closes above it : positivity is imminent.
- Otherwsie : selling pressure will continue. If 7500$ broken , the negativity can be very harsh as the major support monthly level will be broken.
CAC40 : BEARISH DOUBLE TOP- The market has been trading inside a bullish channel from November 2023 to May 2024, taking prices 6750pts to 8260pts ; the long-term trend was then bullish.
- As we approach the end of the trading season (Sell in May and go away), the market, which was already trading at an all-time high, started to consolidate inside a lateral rectangle.
This configuration can be seen as the sign that investors were rebalancing their portfolios and assessing their risk exposure ahead of the summer season.
But quickly the situation turned sour when surprising results from far-right movements in EU parliament elections triggered political havoc in France where president Macron chose to dissolve the National Assembly.
This led to new legislative elections in France where voters had to choose their new MPs.
With such rising political uncertainty in the second Economy of the Eurozone, investors choose to significantly reduce their exposure to stocks, which led the CAC40 index into correction territory.
The reversal double top chart pattern has been validated and the market registered a new market bottom, the first one since November.
The DMI indicator shows a clearly bearish environment while both moving averages are in bearish configuration too.
More recently, the market has consolidated above the 50% Fibonacci level, in a technical price action.
- This is seen as a bearish configuration. The double top pattern is a trend reversal configuration where a 100% correction can generally be legitimately expected.
The results of the FR elections have led to a hung parliament, which isn't the worst outcome for investors, but also doesn't provide much more political visibility in the region.
And with the lack of good reasons to buy, fear trading will likely dominate for the next few weeks.
The next targets can be located around 7,330pts (61.8%), 7,075pts (78.6%) and even lower.
Pierre Veyret, Technical Analyst at ActivTrades
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CAC 40 Offering Bearish Cues!The CAC 40 – a major stock market index covering 40 of the largest companies by market capitalisation listed on the Euronext Paris – recently formed a double-bottom pattern off lows at 7,464. The neckline, taken from the high of 7,725, has also recently been challenged, yet price has failed to establish a close above the barrier to complete the pattern. Therefore, for now, the pattern is still unvalidated. You may also see current price action suggests buyers are unlikely to follow through here. Note that on Friday, a bearish engulfing candle formed. Monday’s action is also on track to offer up a bearish outside day formation (unlike the engulfing pattern, which only takes into account the real bodies, a two-candle outside day considers only the upper and lower shadows).
Regarding the Ichimoku Indicator, price action recently crossed above the Conversion Line (blue – 7,601) but remains below the Base Line (red – 7,764). However, with the Conversion Line now below the Base Line, this is considered a bearish signal. Similarly, we can see that the Leading Span A (light green – 7,682) is now below the Leading Span B (orange – 7,857), which is another bearish cue and provides traders with a resistance zone to work with, commonly referred to as a Kumo Cloud or Ichimoku Cloud.
Price Direction?
Because of the current candle action at the underside of the double-bottom pattern’s neckline, and this market is clearly in an early downtrend since forming the double-top pattern off all-time highs of 8,259, bears could soon make a show and challenge the pattern’s lows of 7,464 and try for support at 7,352. However, If we do see price action close above the double-bottom pattern’s neckline, buyers may soon find resistance from the Kumo Cloud.
FR40 to find sellers at current resistance?FRA40 - 24h expiry
Indecisive price action has resulted in sideways congestion on the intraday chart.
Pivot resistance is at 7700.
We expect a reversal in this move.
Risk/Reward would be poor to call a sell from current levels.
A move through 7625 will confirm the bearish momentum.
We look to Sell at 7700 (stop at 7772)
Our profit targets will be 7520 and 7485
Resistance: 7700 / 7750 / 7775
Support: 7600 / 7550 / 7525
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Buying CAC40I think the market is overreacting and overestimating the impact of french election. Therefore I think the current levels in CAC40 look quite atractive.
CAC40 Enters Seasonal Growth Phase: A Promising Buy OpportunityThe CAC40 index is entering a period where its price historically tends to grow exponentially until the end of August. This seasonal trend presents a significant opportunity for investors. Our analysis has identified a potential Demand area where the price has already shown a rebound, indicating strong support at this level.
This Demand area is particularly compelling as it aligns with the 78% Fibonacci retracement level, a key indicator in technical analysis that often signals strong price reversals. Additionally, we have observed multiple technical indicator divergences in this region, further strengthening the case for a bullish outlook.
Given these favorable conditions, coupled with the historical seasonality trend, we see a strong opportunity for a Buy order. The setup is not only supported by robust technical signals but also by the expected seasonal increase in price. This combination of factors enhances the probability of a successful trade.
Moreover, with a reward potential of 2X, this setup offers an attractive risk-to-reward ratio, making it a compelling buy opportunity for investors. By entering a Buy order at the identified Demand area, traders can position themselves to capitalize on the expected upward movement in the CAC40 index during this period.
In summary, the convergence of the 78% Fibonacci level, technical indicator divergences, and the historical seasonality trend presents a promising opportunity for a Buy order in the CAC40. This well-rounded analysis supports a favorable risk-to-reward ratio, making it a highly attractive investment opportunity as we approach the end of August.
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CAC40 Vulnerable Amidst French TurmoilThesis: A confluence of internal political divisions, social unrest, and external economic pressures creates a compelling shorting opportunity in the CAC40 index.
Key Points:
Domestic Disarray: Recent elections have strengthened the far-right in France, weakening President Macron's centrist hold on power. This political fragmentation leads to policy gridlock and hampers economic stability.
Social Unrest: Macron's economic policies have alienated segments of the population, triggering protests and strikes that disrupt business activity.
Global Headwinds: Rising populism across Europe and the ongoing war in Ukraine create a volatile global economic environment. This uncertainty further strains the French economic outlook through inflationary pressures and supply chain disruptions.
Bearish Outlook for CAC40: The aforementioned factors are likely to negatively impact the performance of companies listed on the CAC40. Investor sentiment is already shifting, as evidenced by recent hedge fund activity in European stocks.
Cac40 France ideaHey Guys,
Yearly is bullish - but only above 7660.
Q Chart is Bearish - Bearish Engulfment.
Monthly as Well. Quarterly Stochastic is turning down.
3 Zones to watch: 8100 7650 7373
Monthly candle is testing Bullish Trendline… Bounce expected to form a lower igh below the Double Bottom. -> Bearish Chartpattern
I will look for an Entry on the Hourly Chart.
Thanks for reading
French stocks subdued ahead of electionsAhead of French elections on Sunday, European markets, led by France, underperform a tech-driven Wall Street. Here, the S&P 500 (+0.65%) has just hit a fresh record high, and was on course to end up for the fourth consecutive week. Month- and quarter-end flows in high-flying tech keeps US equities supported as we head to the second half of the year.
Meanwhile, French stocks remained under pressure ahead of the weekend, with the benchmark CAC testing its lowest levels since January at the time of writing. Investors are not taking any chances heading into the Sunday's snap elections.
But at current levels of around 7460, the index is at a major support. Let's see if dop-buyers re-emerge next week and drive the market higher. However, if the outcome of the elections reveal even more support for the far right wing RN party, then we could see a wobble at the open next week.
By Fawad Razaqzada, market analyst at FOREX.com
CAC 40 struggles to reverse higher after worst week in over two The CAC 40 suffered its worst performance in over two years last week. The political turmoil stemming from the European elections caused the French stock index to drop over 6.5% from the open last Monday as French president Emmanuel Macron called a snap election after the bad results in Sunday’s polls.
The index fell 2.7% on Friday alone as polls showed Marine Le Pen’s far-right Rassemblement National or a left-wing coalition could leave Macron’s centrist alliance out of the running. It seems like the surge in right-wing support has left Macron’s party without most of its centre-left and centre-right support.
Current ministers have warned that if Rassemblement National were to win it could lead to a debt crisis like the one seen in the UK under Liz Truss, with a lack of fiscal responsibility and a clash with Brussels. But even if Le Pen’s party doesn’t win, there is likely to be political instability up ahead, which has led to turmoil in markets.
Yields on French bonds spiked last week with the 10-year yield spread with German bonds shooting up to 0.82%, the highest level in over a decade. But yields on French bonds had already been rising as the S&P S&P Global rating agency downgraded French debt at the close of markets on May 31. The spread between German and French bonds recovered slightly the following week as markets focused on the ECB cutting rates, but Macron’s announced snap legislative elections caused the spread to spike. The timing has been unfortunate as the rating downgrade has added to the perception of financial risks in the French economy.
Concerns about the levels of French corporate debt are starting to come to light and markets are worrying about the impact this can have on the French economy and the Euro bloc as a whole. Stock markets in Spain, Italy and Germany all took a tumble last week as a knock-on effect as the Eurozone debt crisis just over a decade ago no longer seems so far away.
For now, European stocks are attempting a rebound on Monday morning. The DAX 40, EURO STOXX 50 and CAC 40 are all attempting a rebound after bouncing off Friday’s lows, but the momentum seems fragile. Banks, which hold substantial government debt, have been among the worst-performing French stocks.
Last week’s moves have pushed the CAC 40 into oversold territory but it doesn’t seem like this will be enough to stop the bearish momentum. In the last four weeks, the index has dropped below its four key moving averages and therefore there is a lack of immediate support. If the selloff continues, the 7,400 mark has provided support in the past and could offer a chance for new buyers to come in if we see some profit taking this week.
CAC 40 struggles to reverse higher after worst week in over two The CAC 40 suffered its worst performance in over two years last week. The political turmoil stemming from the European elections caused the French stock index to drop over 6.5% from the open last Monday as French president Emmanuel Macron called a snap election after the bad results in Sunday’s polls.
The index fell 2.7% on Friday alone as polls showed Marine Le Pen’s far-right Rassemblement National or a left-wing coalition could leave Macron’s centrist alliance out of the running. It seems like the surge in right-wing support has left Macron’s party without most of its centre-left and centre-right support.
Current ministers have warned that if Rassemblement National were to win it could lead to a debt crisis like the one seen in the UK under Liz Truss, with a lack of fiscal responsibility and a clash with Brussels. But even if Le Pen’s party doesn’t win, there is likely to be political instability up ahead, which has led to turmoil in markets.
Yields on French bonds spiked last week with the 10-year yield spread with German bonds shooting up to 0.82%, the highest level in over a decade. But yields on French bonds had already been rising as the S&P S&P Global rating agency downgraded French debt at the close of markets on May 31. The spread between German and French bonds recovered slightly the following week as markets focused on the ECB cutting rates, but Macron’s announced snap legislative elections caused the spread to spike. The timing has been unfortunate as the rating downgrade has added to the perception of financial risks in the French economy.
Concerns about the levels of French corporate debt are starting to come to light and markets are worrying about the impact this can have on the French economy and the Euro bloc as a whole. Stock markets in Spain, Italy and Germany all took a tumble last week as a knock-on effect as the Eurozone debt crisis just over a decade ago no longer seems so far away.
For now, European stocks are attempting a rebound on Monday morning. The DAX 40, EURO STOXX 50 and CAC 40 are all attempting a rebound after bouncing off Friday’s lows, but the momentum seems fragile. Banks, which hold substantial government debt, have been among the worst-performing French stocks.
Last week’s moves have pushed the CAC 40 into oversold territory but it doesn’t seem like this will be enough to stop the bearish momentum. In the last four weeks, the index has dropped below its four key moving averages and therefore there is a lack of immediate support. If the selloff continues, the 7,400 mark has provided support in the past and could offer a chance for new buyers to come in if we see some profit taking this week.
Double top in playCAC 40 has tested the neckline and now should roll over and move back towards the 7700 level again as a double top is in play.
Paris Stock Exchange Set to Open Lower Amid Political UncertaintThe Paris Stock Exchange is expected to open lower on Monday following the European elections, which have raised concerns about the political landscape in Europe. The CAC 40 futures dropped 76.5 points to 7925 points at around 8:15 am, indicating a session start in the red. Markets are reacting to the rise of nationalist parties and French President Emmanuel Macron's announcement of the dissolution of the National Assembly and early legislative elections. If the far-right National Rally party wins, Macron could lose domestic control, adding uncertainty to the market. The CAC 40 dropped 2.4% at the open, leading European market losses, while the Frankfurt DAX and pan-European Stoxx 600 also retreated. The euro has dropped to its lowest level in nearly a month due to the political developments.
#FAR40The Elliott pattern has finished an upward pulse and is completing the second Elliott pattern. The upward trend is at its end. After the final targets, we can expect a decline.
