Our LT bearish view on the Euro Stoxx 50 Index (SX5E) is still intact and yesterday’s sharp fall could ignite another round of selling.
As mentioned earlier (see 7th September, 20th May and 13th July issues), the SX5E may have topped at 3,836 in April following the fall below 2,998 in August.
Yesterday’s sharp fall could potentially be the start of the next leg down if our Elliott Waves count is ‘correct’.
On the weekly chart, we are likely to see a multiple close key reversal pattern if prices close at or around current levels. This reversal could be a significant reversal.
The immediate move below 3,326 would boost the bearish idea in the ST while a close below the 2,973 would confirm that the index has indeed topped and is likely heading back down to the 2,050 levels next.
Upside resistance is at 3,524 while the key resistance is at 3,715. As long as the key resistance remains intact, we expect the bears to reign in the coming weeks. (Read Report)
Source : CIMB Research