Dow Jones, Nasdaq 100, CAC 40, FTSE 100 Forecasts: Neutral
- The Dow Jones and Nasdaq 100 charged higher last week until running into overhead resistance
- The CAC 40 followed suit, enjoying a substantial recovery until stalling at a horizontal trendline
- Similarly, the FTSE 100 is negotiating the topside of a descending channel as it attempts to push higher still
Dow Jones Technical Forecast
Stocks ripped higher last week despite election uncertainty and other key event risks that worked to inject uncertainty into the market. The recovery saw the Dow Jones and other indices bounce off their respective support levels and charge into various areas of resistance overhead. Now with event risk in the rearview and volatility on the downturn, can stocks push higher still or will they fall into consolidation ahead of their next move?
Dow Jones Price Chart: 1 – Hour Time Frame (September 2020 – November 2020)
Either way, the technical levels at hand may help shape the coming landscape. After bouncing off support near 26,000, the Dow rocketed higher until reaching resistance near the 28,460 area. Now, the Industrial Average may fluctuate between 28,460 and support around the 28,000 level. Should resistance break, a secondary barrier might reside along the descending trendline projection from the September and October highs.
Nasdaq 100 Technical Forecast
While the Dow has yet to reach the trendline projection from the September and October highs, the Nasdaq 100 has already begun to probe the area. Surging to, but then failing to break, the price action exhibited by Nasdaq 100 suggests the level may indeed hold some influence in the days ahead. Thus, it may be considered a key level for both the Nasdaq 100 and the Dow Jones.
Nasdaq 100 Price Chart: 4 – Hour Time Frame (June 2020 – November 2020)
Since the Nasdaq has already mounted one attack, subsequent resistance might be required. To that end, secondary and tertiary levels may reside along the horizontal levels drawn from the October and September highs at 12,253 and 12,466 respectively. On the other hand, the Nasdaq 100 will look for early support along the Fibonacci level at 11,780 followed by 11,570.
CAC 40Technical Forecast
While the US indices have weathered their event risk, not much has changed in the underlying environment of the French index. Thus, I am hesitant to suggest continued strength in the CAC 40 even if the Nasdaq 100 and Dow Jones press higher. With that in mind, recent price action suggests initial resistance resides at the 5,000 mark. Secondary resistance might stand at 5,130.
CAC 40 Price Chart: 4 – Hour Time Frame (April 2020 – November 2020)
A return to risk aversion might see the CAC 40 retreat to prior support near 4,820 and 4,670. In the meantime, follow @PeterHanksFXon Twitter for updates and analysis.
FTSE 100 Technical Forecast
Much of the same can be said for the standing of the FTSE 100. The index has been bleeding lower for months, largely due to uncertainties on the fundamental side. Those concerns have not yet been resolved, so the recent rally seems susceptible to pullbacks. With that in mind, the upper bound of the descending channel might act as resistance while the lower bound could serve as support. Together, the boundaries create an intriguing range-trading landscape.
FTSE 100 Price Chart: 4 – Hour Time Frame (April 2020 – November 2020)
–Written by Peter Hanks, Strategist for DailyFX.com