Technical Analysis: STOXX Europe 600 Basic Resources : the bearish channel is triggered


The STOXX 600 Europe Basic Resources Index includes the 31 most important stocks of the basic resources sector in Europe. The strong uptrend that followed the index since the low point recorded in March ...

Day By Day – Indipendent Research

…2009 was postponed at the beginning of this year, by the major resistance at 626 points, overflowed, and then reintegrated. The prices declined towards the major support at 528.80 points which caused a sharp rebound. We are bullish in the medium-term, anticipating a return to contact the previous peaks in the coming weeks.

04072011 1

Close price 576.74

2 months Opinion BULLISH
2 weeks Opinion POSITIVE

Resistances 583,6 / 610 pts
Supports 558 / 542,7 pts

Anticipation :

In the short-term, prices have just exited from the top of a descending channel, in which they evolved since the beginning of April. The 50-day moving average, which previously played the role of a dynamic resistance, is also overflowed. These elements therefore argue in favor of the extension of the current bullish acceleration for the next sessions.

We are short-term positive and envision a rally towards the resistance at 610 points (theoretical target of the pattern – blue arrows), with an intermediate target of 583.60 points.

We set the invalidation threshold for this positive scenario slightly below the support at 558 points.

Traker’s Name Leverage Expense ratio
ETFX STOXX 600 Basic Resources Fund x1 0,30%
Lyxor ETF Stoxx Europe 600 Basic Resources x1 0,30%
SPDR MSCI Europe Materials ETF x1 0,30%

Follow-up Analysys: Our DBD Tracker dated 27/06/2011 recommended the purchase of the STOXX Europe 600 Health Care Index. Since then, our intermediate target at 401.54 points has been reached and overflowed, a performance of 2%.

* 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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