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Thursday 4 March 2010

Eurostoxx 50. Difficulties to develop a reversal pattern


The Eurostoxx 50 had appeared to be very weak during 2010, especially after the rising trendline breakout in January 15th. Since that moment, the most coherent strategy has been the bearish one. However, prices seem to have found out a reliable support in the short term: the level of 2.670 points. A reversal pattern of shoulder-head-shoulder is beginning to appear. The key points to ensure a successful long strategy is, on the one hand, to go through the neckline, and on the other hand, to do it with the technical indicators in a neutral position. Some fast indicators such as Williams and Stochastics are overbought. Therefore, it should be necessary to have a rest before trying more ambitious goals.

Technical recommendation is to take advantage of possible corrections to the level of 2.750 points, to add long positions. Stop loss in 2.650 points.
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