- A broad, global “risk on” scenario” has resurfaced over the past week through mid-March, rejecting the very early March selloff which was a reaction to heightened fears regarding a global economic slowdown.
- Although no significant positive developments have been made on the US-Sino trade negotiations in the period, the removal of a “No Deal” Brexit has afforded a more positive outlook for European and UK stock markets.
- Here we focus on the pan-European and UK benchmark indices, the EURO STOCXX 50 and FTSE 100 respectively, which have again hit new 2019 highs over the past 24 hours.
EURO STOXX 50 bull trend intact
A resilient consolidation Monday and a prod higher this morning to another new cycle high, to build on Friday’s surge (through resistances at 3273, 3289 and 3299/3300), having rebounded earlier in March from the bull trend line from mid-February (off of 3202), to keep risks higher for Tuesday.
We see an intermediate-term bull theme.
- We see an upside bias for 3312 and 3315; break here aims for 3335, 3333 and maybe 3344.
- But below 3288 opens risk down to 3271, which we would look to try to hold. Below aims for 3261/58.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 3315.
- Higher targets would be 3344 and 3412.
- What Changes This? Below 3188 shifts the outlook back to neutral; through 3168 is needed for a bear theme.
4 Hour Chart
FTSE 100 bull trend extends
A strong rally Monday through resistances at 7172/77 and 7200/01 to another new cycle high for 2019, to build on Friday’s firm advance through the prior February and 2019 cycle high (at 7133.5), to re-energise both short- and intermediate-term bull trends, leaving risks higher for Tuesday.
The early February push above 6998.5 sets an intermediate-term bull trend.
- We see an upside bias for 7221.5; break here aims for 7233.5, possibly 7250/51.
- But below 7179 opens risk down to 7142, that we would look to try to hold. Below targets 7123.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 7455.5 and 7654.5.
- What Changes This? Below 7000.5 shifts the intermediate-term outlook straight to a bear theme.