Stock Index Chart Patterns - FTSE 100, CAC 40, DAX - Dec 11, '09

FTSE 100 index chart

Two week's back, I had mentioned that the European indices were under bear attack. The bulls were not quite ready to give in easily and mounted a spirited fight back.

The FTSE 100 closed lower for the week, and below the 5300 level, but managed to regain the level of the flattening 20 day EMA after seeking support at the 50 day EMA. The 200 day EMA continues to move up, so the bull rally isn't over yet.

Volumes on down days continue to be higher than that on up days. The index has also failed to breach the Nov 16 '09 high of 5397. Those are concerns for the bulls.

So are the negative divergences in the technical indicators, which are looking weak. The RSI, MFI and slow stochastic are at their 50% levels - reflecting the stalemate between the bears and bulls. The MACD is barely positive and below a falling signal line.

DAX index chart

The chart pattern of the DAX index is looking slightly more bullish than that of the FTSE 100. Though the index closed lower for the week, it managed to move above the 20 day EMA. The 50 day and 200 day EMA continue to move up.

The slow stochastic is above the 50% level and trying for a bullish cross. The RSI and MFI have just about moved above their 50% levels. The MACD is touching the signal line and is positive. The Oct 20 '09 high of 5888 needs to be crossed for the bull rally to sustain.

CAC 40 index chart

The CAC 40 index chart pattern is looking the most bullish of the three. The index also closed lower for the week, but above the 20 day EMA. The falling volumes on up days on Thursday and Friday is a concern for the bulls. So is the inability of the CAC 40 to breach the Oct 20 '09 high of 3914.

The slow stochastic is above the 50% level and the %K has made a bullish cross above the %D line. The RSI and MFI have both moved above their 50% levels. The MACD is marginally positive and just above the signal line.

Bottomline? The bulls seem to have fended off the bears pretty well. But the bull rally in the European indices have definitely lost momentum. Some more sideways consolidation is likely. Continue partial profit booking at every rise.