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Technical Analysis: STOXX Europe 600 Industrial Goods & Services index: bounce off the major support

GIORNALE2

Technical Commentary: The STOXX Europe 600 Industrial Goods & Services index is composed by the 97 biggest companies of the industrial sector. It had been bouncing strongly since the end of 2011, recovering from the August crash. This movement is now ....


Day By Day – Indipendent Research


…weakening as shown by the head-and-shoulders reversal pattern recently triggered. Even though the bearish dynamics is not yet fully confirmed, this kind of pattern clearly shows that the previous bullish trend has been interrupted. We are therefore neutral in the medium term.
 
21052012_1

Anticipation  :
On the short term side, prices accelerated deeply on the trigger of the head-and-shoulders.The index actually fell in a straight line down to the 277.10 points major support area. This threshold is important: former resistance tested on several occasions, it is the 61.8% correction level of the rise initiated in November 2011 as well as the theoretical target area of the reversalpattern (purple arrows). The contact with this solid area should therefore cause a technical bounce toward the 291 points resistance. We are positive in the short term.

We set the invalidation level of this bullish opinion slightly below the 277.10 points major support.

Close price 281.49

2 months Opinion NEUTRAL
2 weeks Opinion POSITIVE

Resistances 291 / 298,9 pts
Supports 277,1 / 269,6 pts


Follow-up Analysys: The May 7th, 2012 recommendation was the sale of CAC40 french Index related ETFs (or bearish ETF). Since then, prices fell and our 3065 points target has been reached, leading to a +3.5% performance.

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Source: ETFWorld – Day By Day – Indipendent Research

 

 

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