Asian markets rally, leading to surge in stock indices

Stock Market Analysis: FTSE 100, DAX 40, S&P 500

 

FTSE 100: Trying to Break Through

 

The FTSE 100 is currently attempting to break through a downtrend line that has been in place since July. This is happening after a long weekend in the UK and a decision by Chinese authorities to cut share dealing stamp duty by 50%. The next target for the FTSE 100 is the 55-day simple moving average (SMA) at 7,490, and if it surpasses that, it could reach the psychological mark of 7,500. There is also good support at the May, June, and early August lows, which range from 7,437 to 7,401.

 

DAX 40: Revisiting Last Week’s High

 

The DAX 40 is currently revisiting the high it reached last week at 15,895. This is happening despite German consumer morale unexpectedly falling. If the DAX 40 manages to exceed 15,895, it will then target the 55-day simple moving average (SMA) at 15,973 and the high from August 10th at 16,062. This would confirm a medium-term bullish reversal. In case of a slip, there is support along the breached one-month resistance line, now acting as a support line, at 15,792.

 

S&P 500: Approaching Resistance

 

The S&P 500 is still recovering from the sharp losses it experienced last Thursday. It is now approaching a resistance area between the July-to-August downtrend line and the 55-day simple moving average (SMA) at 4,453 to 4,457. Investors are keeping an eye on today’s U.S. consumer confidence and job openings data. To gain traction and reverse the bearish trend, the S&P 500 needs to surpass the higher high it reached last week at 4,474 and aim for the July peak at 4,607.

 

Minor support can be found at the July low of 4,378, and further down lies major support between the June and mid-August lows, ranging from 4,337 to 4,328.