Technical Update - DAX, FTSE 100 and 250 ripe for correction Technical Update - DAX, FTSE 100 and 250 ripe for correction Technical Update - DAX, FTSE 100 and 250 ripe for correction

Technical Update - DAX, FTSE 100 and 250 ripe for correction

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  DAX, FTSE 100 and FTSE 250 seem ripe for a correction. Earnings and Macro numbers this week could be the ignition


Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team

DAX 40 reached 1.618 projection at 15,222 and then some. Now having been range bound since the peak, the Index seems to be ripe for a correction as indicated by the divergence on RSI. A correction that could take DAX down to 0.382 retracement at 14,705 but a dip down to around 14,356 is not unlikely¨.
For DAX to regain power and extend its (already stretched) uptrend to strong resistance at around 15,619 a close above 15,270 is needed.

      

dax d 30jan
Source all charts and data: Saxo Group
FTSE 100 is similar to most European markets, range bound. Closing just a few p above 7,740 for 8 consecutive days! After sellers have tried to push the Index to 7,700 but failed.
Divergence on RSI indicates a correction is in the cards but as long as FSE 100 can stay above 7,700 it does not seem to unfold.
However. A correction down to 7,600 possibly 7,500 could be seen. But it requires a close below 7,740.
If FTSE instead climbs higher and close above 7,875 a new all-time is likely.
The medium-term trend is up. FTSE 100 is trading in a steep rising channel – weekly chart – and there is no divergence on RSI indicating higher levels in FTSE next couple of months.

For FTSE 100 to reverse the bullish trend a close below 7,300 is needed.

ftse100 d 30jan
ftse100 w 30jan

FTSE 250 seems to be struggling sustaining its uptrend currently failing to make a new higher high above 20,082 short-term. A close above is needed for further upside to resistance area at around 20,395-20,547.
If FTSE 250 closes below 19,574 a correction down to around 19.086 should be expected. 55,200 and 100 Moving Average will provide support.

ftse250 d 30jan

 

RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.