albert.callisto
Long

CAC40 - Long ideas but beware of weak cloud support

FX:FRA40   CAC 40 index of French listed shares
85 0 1
My analysis of CAC40 shares some similarities with the DAX             (see related idea). The cloud is slightly weaker in the case of the CAC40 (thinner before the twist). Some long scenarios come to mind but they are only feasible if the cloud support is strong enough and if the levels present near the cloud have enough buy potential to keep the trend from going downwards. If you go to daily timeframe , you will see that we are still under the cloud (in a bearish environment) but in a trend that is heading towards the cloud. As in the Dax             , we have an ascending channel .

If we stick to Ichimoku H4, we see a lagging span that is ready to get out of its cloud. I expect some small pullbacks towards the H4 Kijun and we will pay attention whether the Tenkan is able to reject them or partially digest the consolidation. Note that the last candle just crossed the daily Kijun, a fairly good sign of some bullish momentum. It is important to keep in mind that we have a twist present around the 3th Feb. These things tend to attract prices like magnets.

I propose two trades, one which is more conservative (see the notes on chart for details), the other being more aggressive (or optimistic?) that gives less weight to the support lines and cloud weakness.
Comment: See how Ichimoku gave us some warnings as the supporting cloud was weak. It prevented us from entering into the risky longs. As mentionned in the chart, price was attracted by the twist and it definitely discarded the whole scenario. Better safe than sorry
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