Date: Thursday 24 May 2012
There are all types of technical formations depending on what European benchmark index we look at. The German Dax, for instance, is trading at a support level and offering us a bullish short-term signal. The EuroStoxx50, on the other hand, is a different story. In this case, we cannot rule out a return to the September and October lows. The Ibex paints an even more dreadful picture. The Spanish index has broken through all of its support levels and does not have any remaining until the 5,300pt level.
Focusing back on the EUROSTOXX 50 index, Europe's leading blue-chip index for the Eurozone, we have a perfect bearish price channel. Therefore, any move towards the top part of this channel would be an opportunity to open short positions. The same is true in the reverse situation, any move to the bottom of the price channel would be an opportunity to go long. Most importantly, the main support levels have already been broken a long time ago and therefore we cannot rule out a move towards 1,950 points in the coming weeks.
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