The Euro Stoxx 50 index in its 2-hour chart reveals exhaustion signals from the current bullish trend. In this post, we will expose our arguments to expect a bearish positioning.
1. Both the RSI as the MACD indicator shows bearish divergences. This exhaustion signal does not mean that the price will reverse immediately; it is only a signal that the market could make a pause of the main trend. In this case, Euro Stoxx could make a momentary halt on its uptrend.
2. The Fear & Greed Index reveals an extreme greed sentiment. Similarly to bearish divergences, the market sentiment is not indicative of an immediate reversion.
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3. A bearish position will activate if Euro Stoxx drops and closes under 3,685 pts. Our conservative perspective, the potential profit target is at 3,635.9 pts. If the pan- European index extends its falls, the index could drop to 3,595.8 pts, until 3,546.7 pts.
4. The sell-side scenario will be invalidated if the price soars above 3,720 pts, or if the Euro Stoxx 50 pierces but don't close below 3,685 pts.
Trading Plan Summary
Entry Level: 3,685 pts.
Protective Stop: 3,720 pts.
1st Profit Target: 3,635.9 pts.
2nd Profit Target: 3,595.8 pts.
3rd Profit Target: 3,546.7 pts.
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Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.
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