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Levels to watch: FTSE 100, DAX and Dow

Global markets have been on the rise, yet with downtrends in place, there is a good chance we will see the sellers come back into play once again.

IG Analyst

Publication date : 2018-12-13T10:25:42+0000

Stock exchange trading

Source: Bloomberg

FTSE 100 regains ground, yet further downside looks likely

The FTSE 100 is continuing its ascent, in a week that has seen the index enjoy a relatively calm trend despite all the political upheaval.

We look likely to continue pushing upwards, but the likeliness is that this is a retracement of the sell-off from the 7146 level. As such, until we break through that 7146 level, there is a good chance that this is a retracement before we turn lower again.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX rebound unlikely to last

The DAX is similarly climbing higher within a downtrend, with the price having hit the trendline resistance.

There is a very good chance we will see the market turn lower before long, in a bid to carry on the downtrend. As such, while we could see further short-term upside, a bearish outlook remains in play for the medium term. A break through the 11,568 level would be required to negate that view.

DAX chart

DAX chart

DAX chart

Dow resurgence expected to be fleeting

The Dow Jones is also strengthening within a downtrend, with the recent break below the 24,243 level providing a clue that the current rally is likely to be a retracement of the 26,071-23,877 sell-off.

Watch for a break below the most recent swing low to signify the beginning of the next leg lower. That level is currently 24,243. A break through the recent high of 26,071 is required to negate the wider bearish outlook.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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