CAC 40 Signal 11/08: Bullish Pennant Forms (Video)

(MENAFN- Daily Forex) Potential signal:

I am buying above 8750, with a stop at 8650 and a target of 8815.

The Parisian CAC has been active in early trading on Monday, as we continue to see a lot of choppiness in an otherwise bullish market.

CAC 40

The Parisian CAC initially pulled back just a touch during the trading session here on Monday, only to turn around and show signs of life. By doing so, this is a market that looks like it wants to continue the uptrend but is still stuck in the throes of consolidation. The consolidation, of course, could be the market simply digesting some of these gains that we've got over the last couple of weeks.

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Ultimately, European indices in general look fairly healthy, and Parisian traders are no exception. The CAC tends to move on luxury, but there are other companies such as Airbus that are involved as well. So, I think this is a good sign for all of Europe. Generally speaking, if the higher end is doing okay, most of the time the industrials will.

Short-term pullbacks, I think, offer nice buying opportunities, and I think the 8,400 euro level, at least at the moment, is the floor in the market. If we can break above 8,750 euros, at that point, I think we will build up enough momentum to continue going higher, and I would be interested in buying. I also like buying dips around the 8,600 euro level and again at the 8,500 euro level, which should be significant support based on the previous resistance Economic Factors and Technical Patterns

Interest rates continue to be a little elevated, but I think the market's starting to look through that a bit. The real question will be about energy in the European Union this winter and whether or not it gets there. France has so many nuclear reactors that does kind of shield it from some of that, but we'll just have to see how that plays out.

The structure, the shape of the candlestick pattern right now, is of a bullish pennant. An ugly one, but it is there nonetheless. And, of course, you could also make an argument for an ascending triangle if you ignore some wicks. So, all things being equal, this is a market that I think is trying to squeeze to the upside, and I remain bullish.

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