The CAC 40 had a strong day during Tuesday’s session alongside other European indices. The CAC added 1.32% to finish at 4,508.91, while the German DAX 30 closed higher by 1.22% to 10,631.55 and in the UK the FTSE 100 benchmark index rose 0.76% to 7,000.06.
Breadth was strong, with 36 of the 40 constituents closing higher for the day. Lafargeholcim Ltd (LHN: PAR) led advancers, climbing 3,62% to €48.48. Technip SA (TEC: PAR) led decliners, losing only 0.77% to close at €58.15.
The CAC 40 index has been range-bound for the better part of the past two months, but that could soon change if it can breakout above resistance, with the highest level in recent weeks at 4,529. A breakout above resistance and the September highs will be viewed as the next stop at 4,570 followed by the April high at 4,607. All moving averages are supportive at this time, as the shorter-term moving averages (20,50-day) are beginning to curl up, indicating a bullish breakout could happen out of the narrowing consolidation.
If the CAC 40 is unable to breakout above resistance it will remain directionless, but still find its moving averages and June trend-line as support. A break below the rising trend-line and moving averages would be needed to turn market sentiment bearish.
Tomorrow, data is light for France and the Eurozone. The big fundamental event of the week is the European Central Bank meeting on Thursday. No changes are expected, but further scope into the thinking of the ECB and the central bank’s President Mario Draghi will have the market’s attention.