The price of the French index continues to break through its diagonal support levels. The price broke below two of the diagonal support trendlines and is currently testing the third. A drop and close below the current diagonal support and below the Fibonacci 38.2% (5200) support would be a very negative development for the index.
Break outs below 5200 (Fibonacci 38.2% and diagonal line trend support) will comple the diamond formation. In this scenario, we expect the CAC40 to reverse its last upward wave, which started around 4725.
Entry: Open short position around 5195 after retest of the 5200 level.
S/L: 5255.
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