France’s CAC 40, Germany’s DAX Set to Fall: Technical Analysis
By Adria Cimino
Oct. 28 (Bloomberg) -- Technical signals show that France’s benchmark CAC 40 Index and Germany’s DAX Index are set to decline in the short term, according to an analyst at Aurel BGC, a Paris-based broker owned by BGC Partners Inc.
The CAC remains positioned for a correction that started when it reached the resistance level of 3,880 points earlier this month and the moving average convergence-divergence confirms the “sell” signal that began a few sessions ago, Alexandre Le Drogoff, an analyst at Aurel, wrote in a note today. “There isn’t a single technical signal that allows us to anticipate a significant rebound at this time.”
He expects a decline to his next objective at 3,630, the short-term pivot point.
For the DAX, the level of 5,000 would be the principal target, Le Drogoff wrote.
“We have enough technical elements today to affirm that a high point has probably been reached on the DAX.”
The index has had trouble advancing after recovering about half of the losses from 2007 to the present, and its failure to move higher is represented by two successive weekly candles in the form of “shooting stars,” according to the note. This signals “the formation of a price summit,” Le Drogoff wrote.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
Last Updated: October 28, 2009 11:54 EDT
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