CAC finds buyers around 5029.56 for the third day in a row
CAC 40 Index (CAC) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, CAC ended Wednesday at 5074.42 edging higher €6.49 (0.13%). Today's close at 5074.42 marks the highest recorded closing price since July 21st. Trading up to €36.19 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CAC as at Sep 16, 2020):
Wednesday's trading range has been €61.96 (1.22%), that's below the last trading month's daily average range of €83.21. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CAC. Prices continued to consolidate within a tight trading range between 4997.86 and 5091.52 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 5029.56 earlier during the day, the CAC bounced off the key technical support level at 5060.43 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on September 8th, CAC gained 1.40% on the following trading day. The index found buyers again today around 5029.56 for the third trading day in a row after having found demand at 5035.10 in the previous session and at 5034.91 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 4997.86 where further sell stops could get activated. Trading close to July's high at 5172.98 we might see further upside momentum if potential buy stops at the level get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for CAC 40. Out of 413 times, CAC closed higher 57.14% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 62.95% with an average market move of 0.64%.
With four out of the other five Major European Indices closing higher today, the ones that stand out on the positive side are BEL20 gaining 0.88% and TECDAX closing 0.79% higher. On the flipside the worst performer has been FTSE closing -0.44% lower. Read more