Stocks in Focus: Experience Setback as FTSE, DAX, S&P Stumble

Stocks in Focus: Experience Setback as FTSE 100, DAX 40, and S&P 500 lose momentum; analysts assess key support and resistance levels.

In a recent market analysis, the FTSE 100, DAX 40, and S&P 500 have all encountered challenges maintaining their positive momentum.

FTSE 100’s Short-Term Highs Diminish

The FTSE 100 reached a nearly three-month high at 7,725 amid a prevailing risk-on sentiment driven by expectations of an earlier-than-anticipated rate cut in the US. However, the index relinquished over half of its intraday gains upon revelations that three out of the nine voting. Bank of England Monetary Policy Members advocated another rate hike. The European Central Bank’s decision to keep rates steady further contributed to profit-taking in European equity indices. Resistance for the FTSE 100 is now between 7,687 and 7,702, with support near the breached September-to-December downtrend line at 7,602.

Stocks in Focus: Experience Setback as FTSE, DAX, S&P Stumble

DAX 40 Retreats from Record Highs

After the European Central Bank clarified that it did not discuss rate cuts in its monetary meeting, the DAX 40 faced resistance around the psychological 17,000 mark despite its robust ascent from October lows. Profit-taking ensued, leading to a decline to 16,661. Despite this setback, the German stock index remains above its October-to-December uptrend line at 16,664, serving as a potential support level. The index could revisit Tuesday’s high at 16,853, with additional minor resistance at Wednesday’s 16,928 high.

S&P 500’s Upside Momentum Wanes

The S&P 500’s significant advance fueled by rate cut expectations shows signs of losing momentum around the 4,739 mark. However, the uptrend remains intact as long as Thursday’s low at 4,694 holds. The ‘triple witching’ of $5 trillion in expiring options colliding with index-rebalancing of the S&P 500 and the Nasdaq 100 anticipates volatility on Friday. Expect support at the March 2022 peak of 4,637, and the medium-term uptrend remains intact, holding recent lows at 4,544 to 4,537. The index is eyeing the November and mid-December 2021 highs at 4,743 to 4,752, aiming to return to its record high set in January 2022 at 4,817.

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