CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Levels to watch: FTSE 100, DAX and Dow

Another leg lower for indices points towards further selling to come, with key support levels being challenged this morning.

IG Analyst

Publication date : 2018-02-22T09:37:31+0000

Video poster image

FTSE 100 rally falls short

The FTSE 100 managed to rally out of a symmetrical triangle formation yesterday, yet the subsequent move turned out to simply be a deep retracement, as the index continues its decline after rejecting the 7312 resistance level.

The overnight move below 7201 points towards further downside to come, with any near-term upside likely to provide a shorting opportunity, as long as the price does not break above yesterday’s peak of 7292.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

DAX challenging key support level

The DAX is also selling off, with the price breaking below the crucial 12,332 support level this morning. An hourly close below there would point towards further downside for the days ahead.

The failure to create a new high points towards a head and shoulders formation being completed, which again points towards a bearish outlook going forward. A break above 12,513 would be required to negate that outlook.

DAX price chart

DAX price chart

DAX price chart

Dow rally fades into sharp downturn

Yesterday’s sharp rally soon faded into significant downside for the Dow Jones, with the index breaking below the key 24,805 support level.

The steepness of yesterday’s sell-off makes it difficult to utilise the prior swing high for risk-to-reward purposes, yet retracements and bearish continuation patterns are worth watching for as potential shorting opportunities. A bearish outlook remains unless we break above 25,298.

Dow Jones price chart

Dow Jones price chart

Dow Jones price chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer

Disclaimer:

All forms of investments carry risks and trading CFDs may not be suitable for everyone. CFDs are leveraged instruments and can result in losses that exceed deposits, so please ensure that you fully understand, and are aware of, the risks and costs involved. Refer to the Risk Disclosure Statement and Risk Fact Sheet.

IG Asia Pte Ltd (Co.Reg.No. 200510021K) is regulated by the Monetary Authority of Singapore and holds a capital markets services licence for dealing in capital markets products that are over-the-counter derivatives contracts and is an exempt financial adviser.

IG provides an execution-only service. The information in this advertisement does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of or solicitation for a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. You should consider your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

This advertisement has not been reviewed by the Monetary Authority of Singapore.