Bullish Corrections on CAC 40 Set Stage for Potential Breakout
16 September 2024
While American indices are bouncing back quickly, European counterparts continue to face challenges, a trend that has been ongoing for some time now. A prime example of this struggle is the French CAC 40, which is having a hard time pushing the price to higher levels. The chart reveals two key bullish corrections that have occurred recently. The first, on the left, is a wedge pattern marked by black lines. This wedge allowed the price to recover to fairly high levels, but it eventually concluded with a breakout to the downside.
Following the wedge, a flag pattern emerged, highlighted by blue lines. In this scenario, the flag acts as a bullish correction within a broader downtrend, indicating the likelihood of a return to the downward movement. A breakout below the lower line of the flag will confirm a sell signal, suggesting a continuation of the downtrend. Conversely, a breakout above the upper line of the flag could signal a buy opportunity, but the probability of that occurring seems limited at the moment.