The big picture of Euro Stoxx 50, exposes to the Pan-European index running at a potential long-term triangle formation in progress which could develop a new bearish movement soon.
According to the Elliott wave theory, the triangle pattern has five internal segments that hold three internal waves each one; it means a 3-3-3-3-3 sequence.
Currently, the Pan-European index moves in the top of the wave D of Intermediate degree labeled in blue of the triangle pattern. This structure, which seems incomplete, moves in the third internal segment as a wave C of Minor degree marked in green.
As known from the wave theory, wave C must progress in a five-wave sequence. In consequence, the current position suggests that Euro Stoxx 50 could make a retracement soon.
A sell position will trigger if the price drops and closes below 3,788.4 pts. Our conservative outlook foresees a potential first bearish target at 3,768.3 pts.
The downward continuation could drive to the Euro Stoxx 50 index to test the 3,749.1 pts until 3,722.3 pts.
The invalidation of our bearish scenario locates at 3,816 pts.
Trading Plan Summary
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Entry Level: 3,788.4 pts.
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Protective Stop: 3,816 pts.
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1st Profit Target: 3,768.3 pts.
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2nd Profit Target: 3,749.1 pts.
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3rd Profit Target: 3,722.3 pts.
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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