- The market has been trading inside a bearish channel since the beginning of April ; the short-term trend is then bearish.
- This bearish short-term trend took place after short-sellers took control of the market following a new record high above 18,600pts.
Indeed, the prospect of a "higher for longer" narrative regarding monetary policies made the current high stock valuations difficult to defend for bull traders, which led to a flag pattern correction.
However, the market recently registered a sharp bounce back over 17,860pts, leading prices to the upper bound of the bearish flag.
Moving averages are reversing while the DMI indicator displays a rising bullish pressure within a directional movement.
- The bearish flag pattern remains valid so far. However, the recent bullish price action confirmed by technical indicators may mean the correction could be over soon.
If the market manages to clear the 18,145pts level, not only the market could go back to its historical high around 18,600pts, but even beyond towards new highs.
This scenario could be confirmed not later than this week as traders patiently wait for more corporate results to see how companies dealt with tighter monetary environment in Q1.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
- This bearish short-term trend took place after short-sellers took control of the market following a new record high above 18,600pts.
Indeed, the prospect of a "higher for longer" narrative regarding monetary policies made the current high stock valuations difficult to defend for bull traders, which led to a flag pattern correction.
However, the market recently registered a sharp bounce back over 17,860pts, leading prices to the upper bound of the bearish flag.
Moving averages are reversing while the DMI indicator displays a rising bullish pressure within a directional movement.
- The bearish flag pattern remains valid so far. However, the recent bullish price action confirmed by technical indicators may mean the correction could be over soon.
If the market manages to clear the 18,145pts level, not only the market could go back to its historical high around 18,600pts, but even beyond towards new highs.
This scenario could be confirmed not later than this week as traders patiently wait for more corporate results to see how companies dealt with tighter monetary environment in Q1.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.