The CAC 40 Continues Post ECB Consolidation

(MENAFN- DailyFX) Talking Points

The CAC 40 Trades Down .27% Prices Remain in a Consolidation Pattern SSI Reads Neutral at +1.14

CAC 40 Daily Chart

(Created using Marketscope 2.0 Charts)

Interested in Learning the Traits of a Successful Trader? Click HERE

The CAC 40 is trading down a modest .27% on the day as the Index continues to consolidate under Thursdays high at 4582. Renault is currently leading the Index trading up 1.88% on the day. Technical traders should note that today’s price action marks the 4th day of trading inside of Thursday’s daily candle. Currently Thursdays high is acting as resistance for the Index which is found at a price of 4582. Conversely Thursday’s low is found at a price of 4305 which is acting as support. These values were put in place after the CAC 40 rapidly rallied then alternatively declined to a monthly low after the ECB’s rate decision.

If prices continue to consolidate traders may elect to wait for a price breakout in the markets chosen direction. Traders may identify preliminary price targets by extrapolating a 1X extension of Thursday’s 277 point range. This places initial bullish targets near 4859. A move to this value would be significant as the CAC40 would be printing new yearly highs at this point. Alternatively bearish targets may initially be found near 4028. A move to this value would suggest that the Index is returning to its predominant daily downtrend and potentially setting up to challenge yearly lows at 3890.

SSI (speculative sentiment index) for the CAC 40 (Ticker: FRA40) is currently reading at +1.14. This sentiment reading is relatively neutral and is congruent with the markets current consolidation. In the event of a breakout traders should continue to monitor SSI. As a contrarian index a bullish breakout may be confirmed by an extreme negative reading. Conversely any bearish breakouts may be validated by an extreme positive SSI reading.

To Receive Walkers’ analysis directly via email please SIGN UP HERE

See Walker’s most recent articles at his Bio Page.

Do you know the biggest mistake traders make? More importantly do you know how to overcome the biggest mistake? Read page 8 of the Traits of Successful Traders Guide to find out [free registration required].

Contact and Follow Walker on Twitter WEnglandFX.