I like the idea of dips as offering value and I do think that eventually we will go looking to much higher levels.
The CAC broke above the 7300 level as it looks like we are ready to continue going much higher. Paris has led the way for a lot of European indices, as the CAC has broken a significant barrier in the form of resistance over the last couple of days. That being said, this is a market that any time we pull back, there should be plenty of buyers who try to get involved in this market which is so strong.
Current volatility is making great stock trading opportunities – don’t miss out!
The 50 day EMA is sitting at the 6975 handle, but it is curling higher, so I think it offers a significant amount of support. Any pullback at this point should attract plenty of buyers going forward, and I think that what we are looking at is a lot of money managers putting cash back to work to load their books for the new year. Nonetheless, we are in a very bullish uptrend, so I think there is no way to fight this. Any pullback at this point in time is likely to be an opportunity to pick up a little bit of value.
Keep in mind that the €7200 level underneath is a large, round, psychologically significant figure and an area that has a little bit of a gap above it. That being said, I think that will offer your short-term “floor in the market”, but not quite as important as the 50 day EMA. Nonetheless, the obvious situation here is that the market is in an uptrend and there is no point in over-complicating things. Because of this, I like the idea of dips as offering value and I do think that eventually we will go looking to much higher levels.
Speaking of those higher levels, the most obvious target would be the 7500 level, simply due to the psychology of that figure. When you look at the “W pattern” that the market just broke out of, it does measure for a move towards the €7700 level, due to the fact that the “W pattern” measures €500. Regardless, everything that I look at on this chart suggests that we are going to go higher, so we need to keep in mind that this is a market that will continue to favor any form of value as an opportunity going forward.
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