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Overbought Condition Unwinds

EUROSTOXX50 TECHS
  • RES 4: 4150.66 High Jan 17, 2008
  • RES 3: 4110.24 High Jan 18, 2008
  • RES 2: 4047.72 2.236 proj of Dec 21 - Jan 8 rally from Jan 28 low
  • RES 1: 4040.88 High Apr 19
  • PRICE: 3940.46 @ Close Apr 20
  • SUP 1: 3935.27 20-day EMA
  • SUP 2: 3910.90 Low Mar 31
  • SUP 3: 3841.46 Low Mar 26
  • SUP 4: 3831.06 50-day EMA

EUROSTOXX 50 gains have stalled and a sharp sell-off dominated yesterday's session. The trend condition is overbought and a short-term pullback is likely a correction that would allow the overbought reading to unwind. The 20-day EMA at 3935.27 marks the next support. A break would signal scope for a deeper pullback and expose the 50-day EMA at 3831.06. On the upside, key short-term resistance is at 4040.88, Monday's high.

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