The Parisian index fell hard during the course of the week, testing the region just above the €4400 support level. This area is significant because it is not only a round number, but it is an area that has been both supportive and resistive previously. With that, we feel that this market needs to find support in this general vicinity because of not only the psychological significance of the number, but the fact that there is an uptrend line somewhere in that general vicinity as well. In other words, we are testing whether or not the trend is going to continue being higher in this market.
Ultimately, we won’t really know until the end of the week, but this should be a fairly impactful few sessions ahead. With that, we are certainly watching this market with great interest as it could be a bit of a harbinger for the way that the European Union in general acts. We believe that France is one of the more stable markets in the European Union, so whether or not the French markets hold up certainly has an impact on the general risk appetite of the region.
We
believe that supportive candle should come into play fairly soon, but
ultimately it could be on the daily chart instead of the weekly chart.
Because of this, we are being somewhat flexible on where we find our
supportive candle, because we believe that this uptrend looks very
strong in general. On supportive candles, we are willing to buy this
market and aim for the €4600 level at the very least. However, we see no
reason why this market will eventually try to reach the €5000 level,
but will more than likely take some significant amount of time to get
there as the market has been going back and forth quite a bit. All one
has to do is look at the trading action over the last six months to see
that there is a lot of choppiness in this marketplace, but ultimately we
most certainly have a bullish bias.
