As CAC 40 Tumbles, Will France's Selloff Stay Contained?
France's stock market index is giving up its 2024 gains and investors must wonder whether it's a canary in the coal mine.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
Newswires are reporting Friday morning that France's CAC 40 stock market index has given up or given back its gains for the year. Imagine if one of the U.S. indexes did the same?
Let's look at two charts for some technical guidance on what is happening exactly and what could be next.
In this weekly bar chart of the CAC 40 below, I can see that prices have turned lower and are testing/breaking the 40-week moving average line. The trend-following Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take-profit sell signal with the oscillator making a bearish divergence when compared to the price action. The indicator made a lower high when prices made a higher high.
In this weekly Point and Figure chart of the CAC 40 below, I used a five-box reversal filter. Here, the software suggests a downside price target in the $6,368 area. Ouch.
Bottom line strategy: While you are having your morning croissant and coffee, think about this: Is the selloff in France unique to France, or could it be a canary in the coal mine?
Enjoy your breakfast.
Employees of TheStreet are prohibited from trading individual securities.