FR40: Technical Analysis – Improving data bullish for French stock index FR 40

May 18, 2018

By IFCMarkets

Improving data bullish for FR40

Expansion in French manufacturing and service sectors accelerated in April. Will the FR 40 continue advancing?

Recent French economic data were positive after the economy slowed down in the first quarter as GDP grew by 0.3% over quarter in the three months to March 2018 after 0.7% expansion in Q4 2017. The composite purchasing managers’ index reported by Markit rose to 56.9 in April from 56.3, indicating expansion in economic activities in April, and the consumer prices inflation slowed less than expected in April. At the same time Insee, the French statistics agency, revised up its estimate of the country’s 2017 economic output: to 2.2% growth from 2016 instead of the 2% previous estimate. Improving economic data are bullish for French stock index FR 40.

FR40


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On the daily timeframe the FR40: D1 is above the 200-day moving average MA(200) which is rising, this is bullish.

  • The Parabolic indicator gives a buy signal.
  • The Donchian channel indicates uptrend: it is tilted up.
  • The MACD indicator gives a nuetral signal: it is above the signal line and the gap is steady.
  • The Stochastic oscillator is rising but has not breached into the overbought zone.

We expect the bullish momentum will resume after the price breaches above the upper Donchian bound at 93.633. A price below that level can be used as an entry point for a pending order to buy. The stop loss can be placed below the lower Donchian bound at 92.29. After placing the pending order, the stop loss is to be moved to the next fractal low, following Parabolic signals. By doing so, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (92.29) without reaching the order, we recommend canceling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

Position Buy
Buy stop Above 93.633
Stop loss Below 92.29

Market Analysis provided by IFCMarkets