CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Levels to watch: FTSE 100, DAX and Dow

Short-term upside for stocks looks like a potential shorting opportunity, given the recent decline across worldwide indices.

anonymous

Publication date : 2018-05-30T09:23:30+0100

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FTSE 100 consolidation expected to lead to further downside

The FTSE 100 has been consolidating since the early losses exhibited yesterday. With the price moving into a previously notable region of resistance, we could see some support come into play.

Despite this, a bearish outlook remains valid, with further downside looking likely from here. The middle Bollinger band has provided reliable resistance within this recent downturn, and thus it makes sense to expect the same on this occasion. Thus a move lower seems imminent. This bearish view remains as long as we are trading below 7761.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX rally unlikely to last

The DAX has also seen some overnight gains following the sharp deterioration around the open yesterday. However, with the price having moved into the 76.4% retracement, there is a good chance we could see another move lower before long.

The first hurdle needed to overcome in a bid to push out of this bearish outlook would be a rally above 12,749, followed by 12,861. Until then a move lower looks likely before long.

DAX chart

DAX chart

DAX chart

Dow rebounds, yet this respite could be fleeting

The Dow Jones has been rebounding in the wake of Tuesday’s sharp deterioration. This looks to be a retracement of a wider 23,531-25,083 rally, pointing towards further downside.

With the 61.8% Fibonacci placed at 2414, another leg lower looks likely. With that in mind, this rally looks like a short-term phenomenon before we move lower once more. As such, a bearish outlook remains in play unless we break above 24,638.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, 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. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Clients can lose more than they deposit. All trading involves risk.

IG is a trading name of IG Markets Ltd and IG Markets South Africa Limited. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in order to utilise their foreign investment allowance should the South African resident wish to open an offshore account with IG Markets Limited.

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