CAC 40 index in its 3-hour chart shows a bearish divergence, which represents an exhaustion signal of the current uptrend. In this post, we expose what to expect before to sell the French stock market.
The global leading indices show ending structures. This context makes us expect that a bearish sentiment could drag CAC 40 on leading stock markets.
In Elliott wave terms, the bearish divergence, warns us that CAC 40 runs in the fifth wave. Though this signal does not mean that the trend will reverse, the appearance represents an alert for bull traders.
The sell-side positioning will come if the price breaks and closes below the 5,818.75 pts. The first potential profit target is at 5,727.5 pts. The following bearish target is at 5,630.75 pts, and finally, at 5,458.75 pts.
The bearish scenario will be invalid if the price pierces but does not close below 5,818.75 pts; or if the French index soars above the 5,910.5 pts.
Trading Plan Summary
Entry Level: 5,818.75 pts.
Protective Stop: 5,910.50 pts.
1st Profit Target: 5,727.50 pts.
2nd Profit Target: 5,630.75 pts.
3rd Profit Target: 5,458.75 pts.
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