The European equity markets have rebounded from the last year’s coronavirus crash lows with similar zeal to that of the United States.
Several major equity indices have made new highs and the “monthly” charts show rapid (and steep) ascents.
And France’s CAC 40 stock index is no different. Today, we look at the “monthly” chart of the CAC 40 index and highlight some troubling developments.
You can see just how quickly the French index has climbed back to the top of its 12 year channel. Not only did the CAC 40 test the top of the price channel, but also its 2000 high at (1). This confluence of resistance turned out to be too much for the CAC 40, creating a bearish doji star pattern in the midst of reversing lower.
If a breakout takes place, break above the 2000 highs at (1), it would send a STRONG bullish message.
Price is now attempting to break below its sharp up-trend line at (2). If weakness persists, it would send a bearish message to French and European investors. Stay tuned!