cac 40
The CAC 40 index is wavering today, continuing the range it has been in in the past few days. The index, which contains 40 of the biggest companies in France, is trading at €5,562 and is up by more than 24% this month alone.
The CAC has moved up because of two main reasons. First, while the number of Covid cases in France has increased, there is a ray of hope because of the recent vaccine updates. With the success in vaccines by Pfizer, AstraZeneca, and Moderna, analysts believe that France will continue delivering shots either in December or in January.
A vaccine is a positive thing for companies in the CAC 40 index because it will mean less lockdowns and more productivity. It will also mean more demand both in France and internationally.
Second, France stocks have rallied because of the recent election in the United States. Investors believe that the relationship between the two countries will improve under the liberal Joe Biden administration. It will also avoid the retaliatory tariffs that Donald Trump had suggested.
The best-performers in the CAC 40 index in the past week are Unibail Rodamco, ArcelorMittal, Credit Agricole, Total, and Renault. The five companies have jumped by more than 9%. On the other hand, the biggest laggards are Carrefour, Pernod Ricard, Hermes, and Alstom.
On the four-hour chart, we see that the CAC 40 index has been on a slow upward trend in the past few days. As a result, the index has formed a rising wedge pattern that is shown in green. In most cases, a rising wedge usually sends a signal that the price will ultimately move lower.
Therefore, in the next few days, I suspect that the index will remain in the current range and possibly break-out lower. If it does, the next support to watch will be €5,500.
