CAC40 in key support zone - Long Term Trade opportunity

CAC40 - Daily

Our expectations: The French benchmark has reached a key support level and that provides an excellent positioning opportunity with long positions, a maximum thin stop and a good risk/return ratio. The price has settled permanently above the peak reached before the crash in 2015, as it is now "lying" on the support zone. The zone is formed by a basic horizontal, an internal diagonal, 23.6% Fibonacci correction of the main trend and a short horizon formed from the previous bottom.

Price Action - The positive hint of the US-EU car-free talks has pushed investors to push the Buy button. This led to the formation of a bullish pin bar in the support zone - a strong signal for a twist and eventual increase in price.

Indicators: DeMarker remains in a neutral zone and does not signal a possible twist. Sequential, however, counts a unit on top, signaling the end of corrective movement and the start of a new upward impulse.

Positioning - Entry from current levels would appeal to more risky traders, and more conservative would wait for a pin bar adjustment. In either case, Stop Loss would have been at levels of 5176.08 to avoid Stop Hunting.

Alternative Scenario: If the price goes below the support area and stays there, the positive scenario will be spoiled and more likely to see a fall in the price of French shares.

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