EUROPEAN SHARES
A bullish sentiment prevails in Europe for the first trading session of the year, with shares climbing significantly across all sectors from London to Milan. Investors have returned to their trading desks with some confidence about this new year, and this has pushed up the FTSE100, the DAX30 and the CAC40 indices 1.54%, 0.70% and 0.50% higher respectively. Most benchmarks are now flirting with major resistances levels, with the STOXX-50 index trading around 3,885 pts, right below the 3,890 pts / 3,900 pts significant zone.
With the lack of any major macro news today, it is however still hard to say if the current price action is being driven by real directional motivations from portfolio managers or if it is just a liquidity bull trap, covering some of last year’s short positions. Transaction volumes are on the rise, but remain unusually low for a non-bank holiday - such a high volatility environment combined with lower market liquidity is often taken as a dangerous sign by stock traders. The 3,890 pts / 3,900 pts zone will be closely watched by investors, as a clearing of this area following today’s close could potentially drive markets further up towards 3,950 pts and 4,000 pts by extension. A failure to clear this level could dramatically dent market sentiment and send prices back to 3,800 pts and even lower towards 3,735 pts.
Pierre Veyret– Technical analyst, ActivTrades
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.