Talking Points
- CAC 40 Prices Open Lower on Chinese Data
- Price Action is Testing Range Support Near 4,300
- Sentiment Readings Drop from Extreme to +1.47
CAC 40 Daily Chart
(Created using Marketscope 2.0 Charts)
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CAC 40 prices have opened the week lower, trading down -.62%. Of the 40 listed stocks, only three are trading higher on the session. ArcelorMittal is currently leading the Index, trading up +.66%. European indices as a whole have been mixed, with markets attempting to sort out a variety of disappointing Chinese data releases. Of note, Chinese retail sales figures slowed to 10.1% for the month of April.
Technically the CAC 40 now testing a key value of support near 4,300. This value is acting as support for a broader range that has been developing for the last eight trading sessions. Resistance for this range remains near 4,350, as previously mentioned in last week's article. So far, in the last eight trading periods, the CAC 40 has traversed this pricing range 5 times. If prices fail to breakout either above resistance or below support, traders may continue to look for range based trading opportunities. Alternatively, in the event of a breakout, traders may look for pricing targets using a 50-point extension of the identified range. This places bearish breakout targets near 4,250 and bullish targets near 4,400.
Find out real time sentiment data with the DailyFX's sentiment page.
Sentiment data for the CAC 40 (Ticker: FRA40) has declined significantly since last week's report. SSI (speculative sentiment index) has declined from an extreme+2.33 to a more neutral reading of +1.47. If SSI continues to move towards +1.00 it may suggest more range bound price action in store for the CAC 40. Conversely, in the event of a breakout, traders may use SSI to validate the move by looking for either a new positive or negative extreme.
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