Technical Analysis: STOXX Europe 600 : An ascending wedge is forming

Monete 2

The STOXX Europe 600 Index includes a total of 600 stocks, large, medium and small caps for a set of 18 countries in the European region. It had an uptrend evidenced by a succession of troughs and peaks which are higher and higher and sustained by the 100-day moving average. The breaking  ....

Day By Day – Indipendent Research

…of the major resistance at 291.50 points in February has led to the end of the bullish trend which was in place since the month of May 2010. The Index is now consolidating between this obstacle and the major support at 262.40 points (a 50% retracement of the rise in May 2010 – February 2011). We are neutral in the medium-term and expect the breaking of one of these two levels to take a definite opinion about the direction of movement to come.

23052011 1

Close price 279.65

2 months Opinion NEUTRAL
2 weeks Opinion NEGATIVE

Resistances 285,3 / 291,5 pts
Supports 277 / 273,4 pts

Anticipation :

In the shorter term, the recovery movement built off the major support at 262.40 points seems to lose its strength at its approach towards the trend line, now a resistance, as evidenced by the formation of an ascending wedge (a pattern of a shortness of breath during a movement). The triggering of this technical configuration (a break below the lower threshold and a breaking of the support at 277 points) should give rise to a strong bearish acceleration.
We are short-term negative and envision a rallying towards the major support at 262.40 points, with two intermediate targets at 273.40 points and 267.50 points. We set the invalidation threshold, lightly, just above the resistance at 285.30 points.

Traker’s Name Leverage Expense ratio
EasyETF Stoxx Europe 600 Double Short Daily x-2 0,60%

Follow-up Analysys: Our DBD Tracker dated 28/03/2011 recommendedg the purchase of the EPRA EUROZONE. Since then, the prices are moving towards the target to  1802 points, a performance of 3.1%.

* A leverage of 1 means that the ETF/Tracker has the same performance as the underlying index. A leverage of 2 indicates that the ETF/Tracker will have twice the performance of the underlying index. A leverage of -1 indicates that the ETF/Tracker will perform opposite that of the index: it will rise while the index falls, and vice versa.



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Source: ETFWorld – Day By Day – Indipendent Research



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