"European stock markets are prepping for a second downside move"

2015-09-23 - Nicolas Gallant, Capital.fr (translated)

According to various technical analysts, the European stock markets are repeating their recent downward spiral. These stakeholders base this interpretations on past price movements and mathematical tools that are used to build the scenarios.

After the fall of the markets in August, the shares of the old continent had enjoyed a respite in recent weeks, with a slight rebound followed by a stabilization of prices. Alas, the sharp fall in the CAC 40 Tuesday, 22 September (-3.4%) appears to have marked the kickoff of a new drop sequence for the next few weeks, according to some technical analysts.

Expected plunge in European

According to Jean-Charles Gand (BBSP), the widening of the Bollinger bands (a gauge of volatility) suggests the beginning of a new phase of turmoil in the Euro Stoxx 50. In its preferred scenario, the benchmark equity index of the euro area would fall to the key area of 3,000 points.

In support of this bearish scenario, the output from the bottom of a flat structure has evolved on the index in recent weeks (called "lateral training"), this occurred with the break below the lower limit, coupled with a negative signal on the MACD (one of the most famous mathematical indicators technical analysts).....


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