FTSE 100, DAX 40 and Nasdaq 100 surge higher on positive outlook
Outlook on FTSE 100, DAX 40 and Nasdaq 100 as the US regulator intends to tighten up on regulations for mid-sized banks and ramp up stress tests.
FTSE 100 nears 7,708 to 7,724 resistance zone
The FTSE 100 rally from last Friday’s 7,331 low has now taken it above its 22 March high on a daily chart closing basis as the UK technically avoided a recession since final fourth quarter Gross Domestic Product (GDP) came in stronger than expected at 0.1%.
This and the fact that the index is on track for two consecutive quarterly gains, a pattern not seen in any bear market over the past 50 years, points towards further upside being seen and the advance since October likely being a new bull market and not a bear market rally.
The 7,708 to 7,724 mid-January and early February lows represent the next upside target and need to be overcome on a daily chart closing basis for the February-to-March downtrend line at 7,852 to be reached next.
Slips should find support around the 7,587 22 March high and along the one-month support line at 7,491.
DAX 40 trades within 1% of this year’s high
The DAX 40 has seen two strong consecutive daily rises over the past couple of days despite German preliminary CPI coming in slightly above expectations on a year-on-year basis at 7.4% in March and despite German retail sales unexpectedly falling by 1.3% month-on-month in February versus an estimate of a 0.5% rise and following a 0.3% drop in February.
The index is thus fast approaching its February and March highs at 15,656 to 15,709, a rise above which would target the November 2021 and January 2022 highs at 16,288 and 16,298.
Support can be found around the 15,304 22 March high and along the 55-day simple moving average (SMA) at 15,290. Now that two consecutive daily chart closes above the 15,304 level have occurred, the resumption of the October-to-March medium-term uptrend seems to have been confirmed.
Nasdaq 100 is trading at levels last seen in October 2022
The fact that the Nasdaq 100 managed to close above its previous 12,947 March peak on a daily chart closing basis on Thursday as the US government urged the country’s financial regulator to tighten up recently relaxed legislation in regards to mid-sized banks and undertake more rigorous stress testing of these, is a blessing for the bulls.
The August 2022 high at 13,206 represents the next upside target, ahead of the 13,722 peak.
Support comes in at previous resistance, namely at the February-to-March highs seen between 12,947 and 12,896 as well as along the March uptrend line at 12,748.
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