- An erratic session on Tuesday, with global equity markets rallying, dipping and rebounding already this week, but the underlying “risk on” theme remains intact.
- Equity markets have been bolstered by positive news from the weekend regarding developments in the US-Sino trade negotiations and more recently by the willingness for the UK Government to look to extend the Brexit leaving date, making a No Deal Brexit less likely.
- This has seen global equity indices move to new 2019 highs in many cases, with European averages doing particular well through late February.
- Here we spotlight the pan-European benchmark, the DJ Euro STOXX 50 and the key German average, the DAX.
DJ Euro STOXX 50 bull theme intact
A rebound Tuesday exactly from our 3258 support, to build on Monday’s probe to a new cycle high by again posting another new cycle high through a 3291 resistance, sustaining bullish forces from the mid-February push up through a notable resistance barrier from October 2018 at 3257, keeping risks higher Wednesday.
The mid-January surge above 3105 set an intermediate-term bull theme.
- We see an upside bias for 3293; break here aims for 3300, then maybe 3312.
- But below 3267 aims for 3258, maybe 3253/52.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 3257.
- Higher targets would be 3306 and 3429.
- What Changes This? Below 3025/22 shifts the outlook back to neutral; through 2931 is needed for a bear theme.
4 Hour Chart
DAX bull trend reinforced
A rebound Tuesday from just below our 11424 support level (from 11421.5) and notably above the notable 11395.5/385.5 foundation area, to push to another new cycle high at 11555.5 just short of a key resistance at 11558, sustaining bullish forces from the latter February, strong advance above the key swing high at 11385, keeping the bias higher Wednesday.
The mid-January probe above key 11245 set an intermediate-term bullish theme.
- We see an upside bias for a key level from December 2018 at 11558 and maybe 11600/610, even towards a swing peak from November 2018 at 11652.5.
- But below 11475 opens risk down to 11421.5, which we would look to try to hold.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 11558.
- Higher targets would be 11814.5 and 12436.
- What Changes This? Below 10779/778.5 shifts the outlook back to neutral; through 10673 is needed for a bear theme.
4 Hour Chart