Improving economic performance is bullish for French stock index
Improving economic performance is bullish for French stock market. Will FR 40 continue rallying?
On the daily timeframe FR 40: D1 has been rising after breached above the resistance line.
- The Donchian channel indicates uptrend: it is tilted up.
- The MACD indicator is bullish: it is above the signal line and the gap is widening.
- The Parabolic indicator has formed a buy signal.
- The stochastic oscillator is in the overbought zone, this is a bearish signal.
We believe the bullish momentum will continue after the price closes above the upper boundary of Donchian channel at 5225.34. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the last fractal low at 5047.14. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (5047.14) without reaching the order (5225.34), we recommend cancelling the position: the market has undergone internal changes which were not taken into account.
Summary of technical analysis:
| Position | Buy |
| Buy stop | Above 5225.34 |
| Stop loss | Below 5047.14 |