Recovery in indices continues with technology stocks leading the way
The FTSE 100, DAX 40 and Nasdaq 100 continue their ascents, boosted by stronger US and Asian equity markets, especially in the technology sector.
FTSE 100 continues to rise despite 30-year high in UK CPI
The recovery in the FTSE 100 100 continues despite UK inflation increasing to a higher than expected 30-year high at 6.2% in February, up from 5.5% in January. The year-on-year retail price index came in as expected at 8.2% compared to 7.8% a month earlier.
The 25 February high at 7,564 remains in focus but is likely to act as resistance, if reached today. Once overcome, the way will be open for the February peak at 7,688.
Slips should find support along the 55-day simple moving average (SMA) at 7,436 and further down at the one-month support line at 7,385 as well as at the breached 2022 downtrend line at 7,364.
DAX 40 benefits from overnight rise in US and Asian stocks
The DAX 40 continues its advance, having so far risen by over 15% from its early March low, on the back of a rebound in US and Asian stocks overnight with the war in Ukraine taking a back seat in investors’ minds.
The 25 February high at 14,678 remains in focus, ahead of a key multi-year resistance area which sits between 14,840 and 14,917 and goes back to the May 2021. Because of inverse polarity, this area is likely to act as strong resistance.
Minor support below yesterday’s low at 14,233 can be spotted between Friday’s low and the previous Friday’s high at 14,106 to 14,102 with further support coming in at the 9 March 13,995 high and 16 March 13,927 low.
Nasdaq 100 leaves bottoming pattern to the upside
US stock futures continue to rally after last week reporting some of their biggest weekly gains since November 2020 with the Nasdaq 100 leaving a double bottom chart formation to the upside and heading towards the 200-day SMA, mid-January low and February highs at 15,133 to 15,164.
Friday’s daily and weekly chart close above the early March high at 14,395 means that a double bottom has been formed, the theoretical upside target of which could take the index all the way to 18,545.
This upside target consists of the distance between the current March low and the early March high, projected higher from the latter. It is valid as long as no slip below the 12,945 current March low is seen.
Support now comes in between the 55-day SMA at 14,430 and the mid-point of the double bottom chart formation at 14,395. Further minor support can be spotted at the 14,040 mid-February low.
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