European Shares May Rally 7.5% If May Peak BreachedInyoung Hwang
The Stoxx Europe 600 Index may climb as much as 7.5 percent to the highest level in more than five years if the gauge surpasses its May peak, according to technical analysts at Credit Suisse Group AG.
The Stoxx 600 reached an intraday high of 310.08 yesterday, testing the 311.07 level it hit on May 22, according to data compiled by Bloomberg. Breaching the 307-to-311 range could push the measure of European equities to between 330 and 333, David Sneddon and Christopher Hine wrote in a report today.
“A break should see a fresh bull leg into the 330/333 zone,” the analysts wrote. At 333, the Stoxx 600 would still be below the intraday high of 400.99 reached in July 2007 and the record of 407.56 the index hit in March 2000.
The Stoxx 600 jumped 1.3 percent yesterday, advancing to the highest level on a closing basis since May 22, as Chinese economic data beat estimates and the U.S. offered to defer an attack on Syria if it complied with a Russian proposal to give up chemical weapons. The gauge advanced 0.3 percent to 310.63 at 11:27 a.m. in London today.
Technical analysts look at price charts to forecast resistance levels, or ceilings restricting further price increases, and support levels, or floors limiting declines.