- The Parisian CAC rallied again during the early hours on Wednesday, as we continue to see a lot of upward pressure in equities globally.
- Because of this, it does suggest that we have plenty of upside potential in this market, but we are pressuring a major resistance barrier in the form of the €8200 level.
- Because of this, I would anticipate some type of short-term pullback, but given enough time I do think that we have an opportunity to buy on the dip as the upward momentum should continue.
Technical Analysis
The 50 day EMA sits near the €8000 level, which of course in and of itself will be an interesting level due to the fact that it is a large, round, psychologically significant figure. After that, we have the €7900 level offering significant support. All things being equal, if the market does pull back, I think there are plenty of buyers it will jump into this market and take advantage of the market.
The €8250 level above has been significant resistance, so I think you need to look at that as an area that I think given enough time we can break above there. If we can break above that level, then it opens up the possibility of moving to the €8500 level, which of course is a large, round, psychologically significant figure. Keep in mind that the CAC will more likely than not follow right along with the DAX, as Germany tends to lead the way overall for the European Union. Furthermore, you need to keep in mind that the CAC is heavily influenced by luxury, so while there are a lot of exports coming out of France, the reality is that it is essentially for the higher end consumer, so it is a little more resilient against recessions, at least to a point.
At this point, I’m looking at this through the prism of buying any type of value that appears, and the €7900 level almost certainly will offer a bit of a short-term floor in the market and I think a lot of people will pay close attention to that area, because if we were to break down below there, we could drop another €300 rather quickly.
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