The CSI 300, the main stock index in China, erased everything lost on Monday Black Monday of the coronavirus – the day that fell 7.88% after returning from the lunar new year holiday. Behind this symbolic milestone is the monetary support announced by the central bank of the asian giant, which has decided to lower interest rates on loans and ensure support for companies that resume the activity.
For this new bullish momentum to be confirmed in the European stock exchanges and transformed into a potential of 10%, from Ecotrader the EuroStoxx 50 is required to overcome “a couple of days” the resistance of 3,855 points, according to Joan Cabrero, the director of analysis of the investment strategies portal of the Economist.
“The latest increases have only strengthened the strength that the bags continue to enjoy and now we are just very aware of whether European exchanges choose to develop a broader consolidation or, on the contrary, they want to star without further delay. continuity towards the following objectives that we manage “, observes Joan Cabrero, who emphasizes that” we have been insisting for weeks that we see it very unlikely that there will be a sustainable ceiling in the European stock exchanges while the German DAX 30 does not reach the area of historical resistance that it presents around 15,000 points, “and notes that” there is still a margin of rise of almost 10%. “
Two sessions above resistances
“A bullish continuity would win many integers if the Eurostoxx 50 manages to beat the 3,855 points and the CAC 40 exceeds the maximums that it established in January at 6,110 points,” warns the strategist at Ecotrader, who concludes that “a couple of daily closures on these resistances, so as not to have to wait for a weekly closure, we would see it enough as confirmation of strength. “
The determined support of the Chinese central bank could be key to building this scenario, but the uncertainty about the threat of the coronavirus is still very present: on Monday the US officially confirmed its impact on economic growth and Moody's downgraded forecasts globally, subtracting up to 5 tenths, up to 5.2% the pace of asian giant.
This Monday, the European exchanges will attack resistance without the reference of Wall Street, which will remain closed for the presidents' holiday and with the increase in tariffs to Airbus very present.
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