France’s CAC Will Cross 4,000, Eye 2011 High, Louis SaysSofia Horta e Costa
France’s benchmark CAC 40 Index will cross the 4,000 mark for the first time since July 2011, and will rally further if it crosses a key resistance level, according to a technical analyst at Louis Capital Markets LLP.
The gauge had in December crossed above a long-term downtrend formed by the successively lower highs of 2011 and 2012 and started a firm medium-term uptrend, Andy Dodd wrote in e-mailed comments. The CAC 40 won’t face resistance until it reaches 4,024, he added.
“I would expect some resistance at those levels, but the uptrend is clearly in place at the moment,” London-based Dodd said. “There is not much in the way of resistance until the 4,024 swing high and I am happy to be long here and buy pullbacks to the uptrend.”
The measure of French equities will come under pressure between 4,024 and 4,088, which are intraday highs reached in July 2011 and January 2010 respectively, Dodd said. A break above this zone will yield more gains and the CAC 40 will rally to as high as 4,170, about the highest level in 2011.
The index, which includes Sanofi, Total SA and BNP Paribas SA, added 0.1 percent to 3,840.61 at 1:59 p.m. in Paris. The measure has risen 5.5 percent so far this year as U.S. lawmakers reached a budget compromise and investors bet that central banks around the world would continue with policies to support economic recovery.
In technical analysis, investors and analysts study charts of price, volume and other trading data to predict changes in a security, commodity, currency or index.