DAX, CAC and FTSE Forecast – European Area Sees Stock Market Recovery

DAX Technical Analysis

The German DAX got crushed at the open on Monday but has since found support at the crucial 23,000-euro level and has even just turned positive. This is a very good sign, and I think at this point in time a little bit of an oversold bounce is more likely than not.

Keep in mind that the DAX, of course, will be highly influenced by the energy situation, but it looks like the G7 countries are willing to release crude oil out into the market from their strategic reserves and probably work something out with natural gas in the United States. That gives the market a little bit of hope.

Regardless, at this point it is just oversold and it certainly looks like it is trying to hang on to the 23,000 level, a very important support level to say the least.

CAC Technical Analysis

The CAC in Paris reached towards the crucial 7700 euros level but turned around to show signs of life as well. This is a market that is most certainly oversold also. I do not know if I want to jump in and start buying it, but it would not surprise me to see Paris go to the 8000 level over the next several days. It could do that and it really would not change anything one way or the other.

FTSE 100 Technical Analysis

The FTSE 100 in London has gapped lower but it looks like the 10,000 level is going to offer quite a bit of psychological support. That makes a certain amount of sense and if we can bounce from here to fill the gap, we could go looking to the 50-day EMA above at the 10,330 region.

Breaking that opens up the possibility of moving to the 10,500 level and possibly beyond. Ultimately though, I think this is a market that is going to continue to be very noisy, but I do think there are value hunters out there willing to get involved at the moment and wanting to take advantage of cheap stocks.