Technical Analysis: Eurostoxx50 index : the bearish dynamics resumes

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Technical Commentary: The Eurostoxx50index is composed by the 50 most important equities of the Euro zone countries. These stocks have been selected among the most liquid and highly capitalized; they are also representing various sectors of European  ....

Day By Day – Indipendent Research

…economies, therefore reflecting their global structure. Since the violent fall last summer, the index has recoveredfor sevenmonths. This movement seems to have ended as prices are no longer bouncing off supports while recent tops and bottoms are lower and lower; even the moving averageis now declining. The former dynamics resumes: we are bearish in the medium term.

Anticipation  :
On the short term side, prices are currently testing the powerful 2192 points support level. This threshold, tested on several occasions, is the 61.8% correction level of the whole rise since the September 2011 bottom. Nevertheless, this major level does not trigger any strong bounces anymore and we can expect its breach.  This event would start a bearish acceleration toward the 2011 lows.

We are therefore negative on the short term and we expect the bearish dynamics to resume with successive targets at 2131 ad 2066 points.

We set the invalidation level of this negative scenario slightly above the 2285 points resistance.

Close price 2255

2 months Opinion BEARISH
2 weeks Opinion NEGATIVE

Resistances 2285 / 2361 pts
Supports 2192 / 2131 pts

Follow-up Analysys: On April 10th, 2012, we have recommended the purchase of Markit iBoxx Euro Liquid Corporates index ETFs related. Since then, the scenario has been confirmed and the 184.30 points target we had set should be reached in the coming days.


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Source: ETFWorld – Day By Day – Indipendent Research



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