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April 10, 2023
- Price action is gradually approaching a key resistance hurdle at 4,317.51
- Upper Bollinger Band® currently at 4,365.72
The sentiment that generated 201.82 points in cumulative gains over the past 6 days was further evident for the STOXX Europe 50 Index. Thursday's session pointed in the same direction — after closing at 4,298.36 the day before, the STOXX Europe 50 Index maintained a strong bullish bias that helped the index close higher at 4,309.45 Thursday. However, market bears ensured the the STOXX Europe 50 Index topped out at 4,313.74 and that by the end of the session, the market had marked out a distinct 4,294 to 4,313.74 range.
The STOXX Europe 50 Index hit a significant low of 3,279 around 6 months ago, but has since recovered 31.09%.
Technical analysis shows that EuroSTOXX could be slowing down soon as it approaches resistance at 4,317.51. Of course, crossing it might suggest further gains are ahead. Trend-following investors would be interested to note that the STOXX Europe 50 Index made an initial breakout above its 3 day Simple Moving Average at 4,309, a potential indicator of a newly emerging bullish phase. Analysis based on the asset volatility indicates that Bollinger Band® analysis indicates that current price action is approaching the upper band at 4,365.72, thereby suggesting that the STOXX Europe 50 Index is becoming overvalued.
Notwithstanding the STOXX Europe 50 Index's appreciation in recent days, the technical outlook suggests its bullish run is now fading.
The STOXX Europe 50 Index shows positive signs, other assets are also on par: FTSE is trading around 7,741.56 after ending Thursday's session at 7,663 (up 1.03% today). KOSPI Composite Index added 0.98% and closed around 2,490.41 Thursday. Nasdaq climbs 0.76% Thursday and closed at 12,000.
Upcoming fundamentals: Euro Zone Retail Sales projected to decline to -0.8% while previous data was 0.3%; data will be released tomorrow at 09:00 UTC.
