MIB 40 Forecast Today 26/7: Looking For Support (Chart)

(MENAFN- Daily Forex)

• In my daily analysis of European indices, the MIB 40 in Italy stood out.
• We gapped lower to plunge quite drastically, and now find ourselves well below the €34,000 level.
• Ultimately, we did bounce quite a bit from the lows of the day so the question now is going to be whether or not we can turn things around?

Keep in mind that money going into Italy is typically looking for“hot returns”, so it is most certainly a play on overall risk appetite. After all, it's much easier to justify investing in Germany that it is Italy when things are a little shaky. The Germans obviously have quite a bit of strength when it comes to exports, while Italy is not necessarily known for this. With that being said I think it's probably only a matter of time before all of the European indices move in the same direction, and of course with the massive destruction that we have seen in Milan, I find it interesting to watch this chart and perhaps use it as a way to turbocharge some of my games Analysis

The technical analysis in this market of course is rather anemic and pathetic, as we gapped below the 50-Day EMA. However, it's probably worth noting that the 200-Day EMA is all the way down at the €32,000 level, so that means we are still very much in an uptrend. That being said, it doesn't necessarily mean that the market is going to take off to the upside anytime soon or necessarily in an easy manner, but it is something that's possible. Regardless, with the market being this far above the 200-Day EMA, I don't have any interest in shorting Italy, although it's one of the indices in the European Union that I would if I were so inclined to start shorting stocks overall.

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In general, I think you need to see the DAX and the CAC both start to rally to show signs of strength here. If we can see other countries like Germany and France turn things around, then it makes a certain amount of sense that money will eventually look to places like Italy and to Spain. Keep an eye on the major indices and what they are doing, because the real gains can be found over here.

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