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Technical Analysis: STOXX Europe 600 : An ascending wedge is forming

The STOXX Europe 600 Index includes a total of 600 stocks, large, medium and small caps for a set of 18 countries in the European region. It had an uptrend evidenced by a succession of troughs and peaks which are higher and higher and sustained by the 100-day moving average. The breaking  ....


Day By Day – Indipendent Research


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…of the major resistance at 291.50 points in February has led to the end of the bullish trend which was in place since the month of May 2010. The Index is now consolidating between this obstacle and the major support at 262.40 points (a 50% retracement of the rise in May 2010 – February 2011). We are neutral in the medium-term and expect the breaking of one of these two levels to take a definite opinion about the direction of movement to come.

23052011 1


Close price 279.65

2 months Opinion NEUTRAL
2 weeks Opinion NEGATIVE

Resistances 285,3 / 291,5 pts
Supports 277 / 273,4 pts


Anticipation :

In the shorter term, the recovery movement built off the major support at 262.40 points seems to lose its strength at its approach towards the trend line, now a resistance, as evidenced by the formation of an ascending wedge (a pattern of a shortness of breath during a movement). The triggering of this technical configuration (a break below the lower threshold and a breaking of the support at 277 points) should give rise to a strong bearish acceleration.
We are short-term negative and envision a rallying towards the major support at 262.40 points, with two intermediate targets at 273.40 points and 267.50 points. We set the invalidation threshold, lightly, just above the resistance at 285.30 points.

Traker’s Name Leverage Expense ratio
AMUNDI ETF SHORT MSCI EUROPE DAILY x-1 0,35%
EasyETF Stoxx Europe 600 Double Short Daily x-2 0,60%

Follow-up Analysys: Our DBD Tracker dated 28/03/2011 recommendedg the purchase of the EPRA EUROZONE. Since then, the prices are moving towards the target to  1802 points, a performance of 3.1%.


* A leverage of 1 means that the ETF/Tracker has the same performance as the underlying index. A leverage of 2 indicates that the ETF/Tracker will have twice the performance of the underlying index. A leverage of -1 indicates that the ETF/Tracker will perform opposite that of the index: it will rise while the index falls, and vice versa.

 


DISCAIMER

This publication is solely intended as information and does not constitute any investment advice or an offer, solicitation or recommendation to acquire or dispose of any investment or to engage in any transaction. Althoughthis publicationis issued in good faith, no representation or warranty, express or implied, is or willbe made and no responsibility or liability is or willbe accepted by NYSE Euronext or by any of its officers, employees or agents in relation to the accuracy or completeness of this publicationand any such liability is expressly disclaimed.No information set out or referred to in this publicationshall form the basis of any contract. The creation of rights and obligations in respect of financial products that are traded on the exchanges operated by NYSE Euronext’s subsidiaries shall depend solely on the applicable rules of the market operator. NYSE Euronext encourages you to reach your own opinion as to whether investments are appropriate or relevant and recommends you not to make any decisions on the basis of the information contained in this publication before checking it, as you will bear full responsibility for any use that you make of it. Persons wishingto trade products available on NYSE Euronextmarkets or wishingto offer such products to third parties are advised, before doing so, to check their legal and regulatory position in the relevant territory and to understand the related risks. All proprietary rights and interest in or connected with this publicationare vested in NYSE Euronext.No part of it may be redistributed or reproduced in any form or by any means or used to make any derivative work (such as translation, transformation, or adaptation) without the prior written permission of NYSE Euronext. NYSE Euronext refers to NYSE Euronext and its affiliates and references to NYSE Euronext in this publication include each and any such company as the context dictates. NYSE EuronextSM, Euronext®, trackers®, are registered marks of NYSE Euronext.

Source: ETFWorld – Day By Day – Indipendent Research

 

 

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