FTSE 100, DAX 40 and Nasdaq 100 begin week on a positive note
Outlook on FTSE 100, DAX 40 and Nasdaq 100 as markets seem to calm down.
FTSE 100 tries to stay above the 200-day SMA
Despite dropping to 7,331 on Friday due to ongoing fears of possible further bank failures being seen, the FTSE 100 managed to close near the 200-day simple moving average (SMA) at 7,431 and is expected to open above it on Monday morning.
This has short-term bullish implications with a probable rise above the March downtrend line at 7,480 putting the 17 March high at 7,511 on the plate.
Provided that Friday’s low at 7,331 holds on a daily chart closing basis, a recovery towards last week’s high at 7,587 is expected to take place, a rise above which would push the 15 March high at 7,641 to the fore. Further up sits strong resistance at 7,708 to 7,724, made up of the mid-January and early February lows.
Support below the 200-day SMA at 7,431 can be spotted around the 7,296 December low.
DAX 40 expected to build on last week’s gains
The DAX 40, despite dropping to 14,801 on Friday over the recent banking turmoil and worries of a global recession, managed to close the week above the minor psychological 15,000 mark and is expected to build on last week’s gains.
The index is seen heading back up towards the March downtrend line at 15,176, a break through which would lead to the 55-day SMA at 15,262 and last week’s peak at 15,304 being back in the picture.
From a technical perspective, while Friday’s low at 14,801 holds on a daily chart closing basis, further upside is likely to be seen with the resumption of the October-to-March medium-term uptrend becoming a distinct possibility once last week’s high at 15,304 has been overcome.
Minor support can be found at the mid- to late January lows at 14,992 to 14,904 as well as at the 13 March low at 14,885.
Nasdaq 100 trades close to its 7-month high
Despite last week’s volatility, the Nasdaq 100 saw its second consecutive weekly positive close, having briefly traded in 7-month highs as some investors who sold their bank shares parked their money in the tech sector.
Investors’ main concern now is that the ongoing deposit flight from banks will result in a major contraction of lending activity which may push the global economy towards a recession. This was, however, tempered over the weekend by comments from the International Monetary Fund (IMF) head, Kristalina Georgieva, who said that China is showing signs of a robust economic recovery.
Most Asian equity indices seem to have therefore shrugged off the fact that China’s industrial production profits dropped by 22.9% year-on-year in the first couple of months of the year.
The Nasdaq 100 will likely this week once more try to exceed the February-to-March highs at 12,896 to 12,947 and do so on a daily chart closing basis, in which case further medium-term upside may well take the index towards the minor psychological 13,000 mark.
Were a slip through the March uptrend line at 12,702 to be seen, however, Friday’s low at 12,601 would be back in the frame.
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