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Technical Update - AEX25, BEL20 & CAC40 Technical Update - AEX25, BEL20 & CAC40 Technical Update - AEX25, BEL20 & CAC40

Technical Update - AEX25, BEL20 & CAC40

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  AEX25 formed top and reversal pattern but not yet confirmed reversal
BEL20 still rangebound needs to break out
CAC40 uptrend remains but is weakening


Listen to today’s podcast - slides are available via the link.

AEX25
has formed a top and reversal pattern in the form of an Evening star formation (circled). There is divergence on RSI after AEX has been trading in an Rising Wedge like pattern for the past 3 months.
A close below the lower rising trendline will indicate a correction is unfolding and it will be confirmed if AEX closes below 748.
Support at around 735
A close above 778 will demolish the correction outlook and extend the uptrend to around 800-812.

Source all charts and data: Saxo Group

BEL20 is testing the upper falling trendline in the Symmetrical triangle like pattern the Index is forming. As long as BEL20 does not take out the4 peak at 3,963 the Bearish Engulfing top and reversal pattern is valid.
However, BEL 20 needs to close below key support at 3,819 for a confirmed downtrend that could take the Index down to strong support at round 3,700.
If BEL 20 breaks above 3,963 there is room up strong resistnace at around 4,031. Interestingly RSI is still showing positive sentiment and no divergence indicating we could see a move higher.

CAC40 uptrend remains strong testing all-time highs. However, RSI is showing divergence indicating uptrend is weakening but for  CAC40 to reverse the uptrend a close below 7,074 is needed. But look out for a potential top and reversal pattern to be drawn which could signal the a reversal.
A close above all-time highs will pave the way for a potential move to around 7,590

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

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