Friday, 23 November 2012

Daily analysis on EUSTOXX50 and IBEX

Taking the opportunity from the Thanksgiving holiday and the fact that US markets are closed, we focus on two European indices. The common ground between Eurostoxx50 and IBEX35 is the sideways volatile movement of the last month. Both indices have been trading within a trading range that although it may be tiresome to be watched, it is helpful because it provides us with clear support and resistance levels that we should trade based on them.

Eurostoxx50 as shown in the chart above is closing its trading range making it easier for us to trade. A clean break above 2580 gives us 2700 as a target. Resistance of the downward sloping trendline at 2540 could be used for entering short positions. Support at 2430 could be the downward target as the 200 EMA is also found at that level. From the Elliott wave perspective this sideways overlapping pattern is corrective and it is more probable to see a break out above resistance. Long positions should be considered near support levels or after a clean break of resistance levels.

 IBEX35 as shown on the chart above has made a similar pattern during the last month as Eurostoxx50. The movement of prices is sideways with a small downward slope. Recent daily closes find IBEX just above the lower pitchfork support as depicted in the chart. The trading range in IBEX is between 7490 and 8150. The index displays no clear impulsive move towards any direction. The trading strategy adopted should be similar to the one mentioned above. An upward break is more possible due to the absence of a clear downward impulsive move. If the sequence of lower highs is broken in IBEX (8000-8150-8230) then a new upward move will be triggered. Always trade near support or resistance levels or after a break out.

As always, thank you for taking the time to read my post.

1 comment:

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