The French stock market index CAC40 is breaking out! And it’s not a regular breakout, it’s a secular breakout! We didn’t cover European stock markets as part of our market forecasts nor did we flash a specific 2021 forecast for Europe. Regardless, it is clear that is happening NOW, particularly in France!
We feature the daily and weekly CAC40 charts in this article, in this order.
The daily has been ‘flirting’ with the 5650 level for +2 months, see the hesitation right below the red thick line on below chart. Early January, there was an attempt to ‘break up’, but it failed. The short term volatility at the end of January, which was shortlived, prevented the CAC40 index to move higher.
Last week Monday, however, it was hallelulaj-time: the long awaited breakout was a fact. Better, it was the start.
Why is this red thick line so important?
The weekly chart, below, explains why that’s the case.
It was resistance in 2017 and also in 2018.
The CAC40 index broke higher in October of 2019, but had to back down when the Corona crash started.
So this index is trying to move above this level for 4 years in a row, and only succeeded for some 2 months (end of 2019 / early 2020).
Now THAT is a secular level, and THIS is a secular breakout. Or better, the start of a secular breakout. It looks promising, and certainly worth buying. Which stock to buy? Continue reading to find out.
