Top pick for the day - France’s CAC 40

The tumble is nigh


France’s CAC 40 Index (CAC) appears ready to take a wicked tumble sooner… or marginally later.

The CAC has the cleanest wave count among the European markets and it appears poised for a move lower – a really BIG one.

Our earlier LT forecast remains intact (see 2nd October issue) while the short term move took the alternative view.

With the recent move to above 4,733, we think that the counter trend top may be in place at 4,744. Closing below 4,580 would boost the idea that the top is in place while the critical support remains at 4,230.

A break below 4,230 would confirm that the third of a third wave down is taking place, where the index should encounter the strongest selling pressure.

The CAC could easily fall to 3,758 at the minimum but it is most likely fall towards 3,148, the 1.618x extension of wave 3(i).

Only a strong rally to above 5,217 would cancel out this LT bearish view.

Get ready for the big move now as something big could be taking place in the coming weeks!

Tighten stops now if you are still long. (Read Report)

Source : CIMB Research

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