One area of hope for this major European stock index`
12th November 2018 08:45
Just like its European counterparts, the French index has recently taken a nose-dive. Chartist Alistair Strang shares his expertise on where potential movements may lie.
France, The CAC40 Big Picture
Following a week where one of the UK Brexit ministerial team appeared to express surprise at the UK being an island, importing 'stuff' by sea, it seems sensible to review how our nearest neighbour is doing in terms of their market.
The immediate prospects for the French index are not great. The market is trading in a bit of a depressing situation, where weakness again below 4,900 looks capable of relaxing the CAC down to 4,450 points next. If broken, secondary is at 3,860 points.
To utterly cancel these relaxation potentials, the index requires better 5,500 points; blue on the chart.
Oddly, neither calculation is particularly alarming if we zoom out and review behaviour since the gory days of 2009. Visually, our secondary ambition at 3,860 isn't particularly alarming insofar it fails to trouble the uptrend since the last crash. Even better, it matches a series of lows since 2014, hinting quite strongly of a future bounce should 3,860 make a guest appearance.
At present, trading around the 5,100 level, we actually need the market above 5,210 before we dare view it as heading upward to an initial 5,314 points. If bettered, secondary comes along at 5,460 points, along with a future challenge of the blue line.
One interesting item of hope, one which we're not confident will prove valid against an entire index, is the circled GaGa movement.
Generally, a gap down gap up is a comfortable(ish) signal a price is about to be influenced upward. In the case of the CAC40, this GaGa calculates with 5,460 sometime in the future. We're not holding our breath!
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
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