Global Equity Markets Plummet; Major Support in Focus

Steffy Bogdanova
March 15, 2023 8:14 pm

This article was submitted by FP Markets.

It has been quite a day across global stock markets. As banking stocks gave up earlier upside, European equity indices tumbled on Wednesday, with the FTSE 100 dropping nearly 4.0% and Germany’s DAX falling 3.3%.

US markets also slumped, weighed by banking giant Credit Suisse shedding more than 20% and clocking an all-time low, following its largest shareholder pulling back on support, the Saudi National Bank. This stock has been in a downtrend for two years (chart below showing clear-cut downside bias); therefore, there are clearly issues within the organisation predating the SVB failure.

Credit Suisse:

Global Equity Markets Plummet; Major Support in Focus, FP MarketsDAX 40 Eyeing Key Daily Support

Recording its largest one-day decline since August 2022, the DAX is on the doorstep of key support on the daily timeframe at 14,602. You will note that this Quasimodo resistance-turned-support formation is accompanied by hidden positive divergence from the Relative Strength Index (RSI). Also note that since the index bottomed in early October, we have seen an uptrend form, constructed through a series of higher highs and higher lows. As a result, the aforementioned support level could be a decisive base: we respond from here and push on to forge fresh highs or rupture support and establish a lower high and a subsequent lower low to form a downtrend.

Global Equity Markets Plummet; Major Support in Focus, FP Markets

Daily Market Commentary

Interestingly, we see a comparable picture on the CAC 40—the benchmark stock index from France—and the EU50, which is the Euro Stoxx 50 that houses the largest companies in Europe. The two charts are shown below. You will see that the CAC 40 displays a daily Quasimodo resistance-turned-support at 6,791 that is joined by RSI positive hidden divergence. However, you will recognise that the EU50 is actually testing its daily Quasimodo resistance-turned-support at 4,016, alongside positive hidden RSI divergence. Consequently, this may add weight to the DAX and CAC 40 finding support should the latter hold ground.

CAC 40:

EU50:

Global Equity Markets Plummet; Major Support in Focus, FP MarketsCharts: Trading View

Disclaimer: The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice.

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LeapRate Analyst

Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
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