CAC 40 Is Still Within A Short-Term Rising Channel | Technical Analysis
From around the end of September, CAC 40 has been trading inside a rising channel pattern. After yesterday’ rebound from the lower side of that formation, the French index climbed back up to the middle of that channel and continues to point north. At the time of writing, the price is finding resistance near the 4927 hurdle, marked near the low of October 13th and an intraday swing low of October 14th. As long as CAC 40 stays withing the boundaries of that pattern, there is a good chance of seeing the price moving higher. However, to get a bit more excited with further upside in the near term, we would prefer to wait for strong push above the 4927 territory first.
A further push north, above the aforementioned 4927 hurdle, could clear the path to the 4965 obstacle, or even to the 4998 hurdle, marked by the highs of October 14th and 12th respectively. The French index might stall near the latter level, as it is the current highest point of October. That said, if that is only a temporary halt, the bulls may continue applying pressure on CAC 40 and send it further north. That’s when we will target the 5055 barrier, marked by the high of September 17th, or the upper bound of the previously-mentioned rising channel.
Looking at the RSI and the MACD on our 4-hour chart, both of the indicators are currently pointing higher. Although the RSI is sitting above 50, the MACD still remains slightly below zero and its trigger line. Although the RSI seems to be in support of the upside scenario, the MACD confirms our view of waiting for a pop above the 4927 hurdle first.
If CAC 40 suddenly breaks the lower bound of the channel and then slides below this week’ low, at 4807, that would confirm a forthcoming lower low, potentially inviting more sellers into the game. That’s when the price may fall to the 4755 obstacle, or even the 4724 zone, marked by the current lowest point of October and an intraday swing high of September 25th respectively. If the slide continues, the next potential support area could be seen near the lowest point of September, at 4664.
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