France’s CAC 40 Index (CAC) continued to rally in line with the global markets… but the pattern since the 4,230 lows in August continue to look corrective.
CAC remains one of the indices with the ‘cleanest’ wave count and the downtrend remains intact as mentioned in our previous note (see 21st October issue).
We were expecting the CAC to tumble in October but the index continued to labour-on higher to current levels, which is now marginally short of the 78.6%FR levels of the August fall.
The current rally does not change our LT outlook but a strong move above the 78.6%FR would weaken our bearish conviction.
A move above 5,217 would cancel out the bearish view, allowing for another push to new highs above 5,283.
What is required here for the bears to take control again would be a sharp fall below 4,845 and 4,733.
But do the bears have what it takes to take control? Hopefully in the next few days, the market would decide which way the CAC would head for the coming months. (Read Report)
Source : CIMB Research