The French stock bourse, the CAC 40, turned sharply lower yesterday and continued falling after the FOMC rate decision. The price decline was led by BNP Paribas which fell over 3.7 percent and AXA which also lost 3.7 percent. Shares of Peugeot were also significantly lower on the day. Only Sanofi, Unibal and Nokia bucked the down day to show some gains.
At this point technical traders should look for key values of support. Right now, the fall is being contained by the rising trend line set by a series of lower highs from the September 16 low to the October 13th low.
French CAC Technical Analysis
Should the rising trend line fail to hold, then we could see steeper declines from the French stock bourse. There is a key level of support around the 200 day moving average at 4,380.10. A move below this point would suggest a more bearish trend emerging.
Should French stocks find support here then we would see the current bull trend continue as this was a temporary contraction lower to wind the market up. In this scenario traders should look at the October price high at 4,579.30. Long term traders need to continue to watch this level as it is significant. Should this happen the retracement of gains was just that a correction lower in a bull trend.