EUROPEAN TECHNICAL OUTLOOK

Due to the closure of US markets – the President’s Day was yesterday, recently I want to make a technical summary for European markets. Monday FTSE gained more than 1% the other indices were doing nothing, just flat, which not bad after two weeks gaining.

• FTSE100 6,736 +72 1.09% 
• DAX 9,657 -5 0.06% 
• CAC40 4,335 -5 0.12% 
• FTSEMIB 20,460 +24 0.12% 
• IBEX35 10,119 -14 0.14% 

FTSE:

Generally the FTSE is lagging. Show some weakness if we compare to the other European indices like CAC40 or DAX. They both are close to their previous historical highs but FTSE is still far from that level. There is a gap between them and might be a good arbitrage option to buy FTSE.

The chart clearly shows that the tops are always higher. At the beginning of this February the FTSE made a bearish trap – marked with the arrow – it seemed wants to fall. But later recovered in a superfast way almost without any correction and made its one of the best one week rally. Our bet is within a week the index will hit the 6.850 level again.

DAX:

The uptrend is not violated since 2012 and extremely bullish the German index. Technically on the chart we can find a reversal Head&Shoulder pattern which gives us a clear indication for the following uptrend. The price is so close to the previous top at 9.750. That is only 100points away from here. Shortly the index needs to hit that resistance level and goes further up to new historical high.

The BFM Assets Team.