Stoxx 600 Index May Return to This Year’s Lowest Level: Technical Analysis

The Stoxx Europe 600 Index may return to its lowest this year if the benchmark measure fails to rebound from a level it set in August, according to Ouri Mimran, a technical analyst at Natixis in Paris.

Mimran said the gauge began an inverted head-and-shoulders pattern when it set a low of 217.37 on Aug. 9. The Stoxx 600 will rally from that level this week, climbing to its next resistance level of 250.7, or it will fall below the August level, probably declining to its Sept. 23 low of 209.26, Mimran wrote in a note today. The 209.26 level was the index’s lowest this year.

“If the index can rebound a third time from the first low point, that’s positive,” Mimran said in a telephone interview. “A rebound from 217 can give the market a bit of air. It’s the last point where the market can find support. If it doesn’t, we’ll go much lower.”

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. They look for support levels that may stop prices from falling and resistances that act as ceilings limiting gains.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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