End of the correction for equity markets ?
- the market has been trading lower and lower, within a bearish channel since mid-December 2023. The medium-term trend is therefore bearish.
- This bearish channel occurs as a continuation flag pattern, correcting the bullish trend that began in October 2023.
This correction was explained at the fundamental level by fading hopes for a dovish change in monetary policies in Europe and the United States, due to the latest encouraging economic data, as well as central bankers confirming that the battle against inflation still wasn't over.
Very recently, prices registered a strong rebound above 4,380.0pts, thanks to the latest very positive results from Taiwan Semiconductor Manufacturing which forecasts a strong increase in growth in the sector.
These results encouraged investors to pile up long positions in a market that has become much more attractive after the recent discount.
Technically speaking, prices are trading very close to the upper limit of their bearish channel, but the 2 moving averages continue to validate the rise while the RSI has already announced a bullish breakout to come.
- It is now possible to envisage that the correction that began in January is coming to an end. If prices manage to confirm the bullish breakout of their medium-term channel, this would pave the way for new tops. The next resistances could be found around 4,500.0pts, 4,600.0pts then 4,680.0pts and even higher by extension.
- This bearish channel occurs as a continuation flag pattern, correcting the bullish trend that began in October 2023.
This correction was explained at the fundamental level by fading hopes for a dovish change in monetary policies in Europe and the United States, due to the latest encouraging economic data, as well as central bankers confirming that the battle against inflation still wasn't over.
Very recently, prices registered a strong rebound above 4,380.0pts, thanks to the latest very positive results from Taiwan Semiconductor Manufacturing which forecasts a strong increase in growth in the sector.
These results encouraged investors to pile up long positions in a market that has become much more attractive after the recent discount.
Technically speaking, prices are trading very close to the upper limit of their bearish channel, but the 2 moving averages continue to validate the rise while the RSI has already announced a bullish breakout to come.
- It is now possible to envisage that the correction that began in January is coming to an end. If prices manage to confirm the bullish breakout of their medium-term channel, this would pave the way for new tops. The next resistances could be found around 4,500.0pts, 4,600.0pts then 4,680.0pts and even higher by extension.