European Open: Key Reversal on the Dax?

Asian Indices:

• Australia's ASX 200 index fell by -39.4 points (-0.53%) and currently trades at 7,357.10
• Japan's Nikkei 225 index has risen by 36.88 points (0.12%) and currently trades at 29,782.75
• Hong Kong's Hang Seng index has fallen by -87.86 points (-0.35%) and currently trades at 24,962.11
• China's A50 Index has risen by 63.35 points (0.41%) and currently trades at 15,683.74

UK and Europe:

• UK's FTSE 100 futures are currently up 13 points (0.18%), the cash market is currently estimated to open at 7,236.57
• Euro STOXX 50 futures are currently up 7.5 points (0.17%), the cash market is currently estimated to open at 4,363.97
• Germany's DAX futures are currently up 25 points (0.15%), the cash market is currently estimated to open at 16,184.97

US Futures:

• DJI futures are currently up 268.92 points (0.75%)
• S&P 500 futures are currently up 41.25 points (0.25%)
• Nasdaq 100 futures are currently up 13 points (0.28%)

DAX enters corrective phase

European equities closed lower for the first week in seven on Friday, as Austria announced it would go back into lockdown to fend off rising cases. The sudden lockdown also fanned fears that other parts of Europe could be in lockdown over Christmas.

The Dax printed a bearish engulfing candle on Friday, and its volumes was around 40% above its 20-day average which suggests a key reversal day has formed just below its record high. Whilst prices are expected to open slightly higher today, Thursday’s low at 16,193 could be pivotal in today’s session for intraday traders. But whilst prices remain below 16290.19 then the bias is for a move to 16,000 where the 20-day eMA and previous resistance turned support resides.

Australia to relax border restrictions

Foreign visa holders, vaccinated students, business visa holders and refugees will be able to enter from the beginning of December without having to quarantine for 2 weeks. The Australian and New Zealand dollar were the strongest major overnight on news that border restrictions will be relaxed in December. The positive sentiment failed to make its way over to the ASX 200 which fell -0.8% early in the session, led by travel stocks.

PBOC holds policy steady

The PBOC (Peoples Bank of China) kept rates unchanged as expected. The 1-year loan prime rate remains at 3.85% for a 19^th month and the 5-year is at 4.65%. Separately, President Xi said that China will not use their size to bully smaller counties at the China-ASEAN summit. And China have also downgraded their diplomatic ties with Lithuania after Taiwan opened an embassy there.

The FTSE 100 reached our 7200 target

The FTSE fell for a fourth consecutive day on Friday, or its third since breaking trend support on Wednesday and falling to the base of the channel at 7200. This may prove to be a tough nut to crack initially, and as we’ve seen a decent move to the downside we’re happy to hold a neutral view over the near-term and step aside.

FTSE 350: 4153.16 (-0.45%) 19 November 2021

• 130 (37.04%) stocks advanced and 206 (58.69%) declined
• 22 stocks rose to a new 52-week high, 12 fell to new lows
• 100% of stocks closed above their 200-day average
• 56.41% of stocks closed above their 50-day average
• 28.77% of stocks closed above their 20-day average

Outperformers:

• + 6.84%-Ocado Group PLC(OCDO.L)
• + 4.70%-Baltic Classifieds Group PLC(BCG.L)
• + 3.70%-Royal Mail PLC(RMG.L)

Underperformers:

• -8.00%-Mitie Group PLC(MTO.L)
• -5.22%-Compass Group PLC(CPG.L)
• -4.64%-Wizz Air Holdings PLC(WIZZ.L)

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