Stocks in the Positive, but Will They Continue?
European Stocks Follow Positive Asian Leads
European stock indexes are mainly in the green today as strong gains continue on from today’s Asian session. The ASX added 4.17% and the Hang Seng closed 4.37% higher.
Shares have been recovering since the Federal Reserve announced on Monday that it intends on running an open-ended asset purchase program during the Covid-19 outbreak. There has been some positive influence from news out of Italy showing that Covid-19 cases had slowed for the second day.
It might be a little early to start calling this a slowdown but it is definitely a good sign, not only for Italy but for the global community. Let’s hope that cases continue to slow down.
Currently, we’re seeing solid gains in Europe with the DAX trading 5% higher and the CAC trading over 4% higher. EU flash PMI data came in mixed today, German Flash Manufacturing beat expectations, whilst the Services PMI missed expectations.
U.S. Futures are also tracking higher off the back of the Fed asset purchasing plan. The DOW is 4.75% in the green. The markets and U.S. citizens are still waiting on the Covid-19 stimulus package that remains in the hands of the U.S. Senate. Depending on when this is released and the final details, stocks could see a further bounce.
On the GER30 4-hour chart, we can see buyers broke above the range high in today’s Asian session, the starting point for a new breakout. We’ll now be watching to see how buyers react if they can reach the next resistance point above. This will carry forward the current pattern of HH’s and HL’s which is what you want to see in an uptrend. For now, buyers look to be holding a new uptrend after making the first HL and HH. We have a rough road map of points heading forward, these are not forecast points! It’s just a pattern we’d like to see price continue in to show the uptrend is continuing.
If we see a pullback that breaks the last lower HL this could be putting pressure on the current recovery trend.