Current trend

One of the leading indices of the European economy, the CAC 40, is correcting at 7359.0 amid the publication of reports from component companies.

Energy industrial group Engie SA posted revenue of 15.10 billion euros, beating estimates of 14.84 billion euros, and earnings per share amounted to 0.390 euros, up from 0.310 euros in the same period last year.

In turn, revenue of the electrical products manufacturer Legrand SA reached 2.02 billion euros, meeting analysts' expectations, after 2.01 billion euros shown last year, and profit per share amounted to 1.04 euros, while experts expected 1.01 euros.

Veolia Environnement VE SA reported revenue of 10.40 billion euros, beating estimates of 10.27 billion euros, while earnings per share rose to 0.44 euros from 0.42 euros last year, missing estimates of 0.46 euros.

The yield on the entire line of bonds is slightly decreasing: the rate on 10-year debt securities fell to 3.130% from 3.210%, and on 20-year ones — to 3.407% from 3.495%.

At the moment, the growth leaders in the index are: Accor SA ( 1.92%), Unibail-Rodamco-Westfield SE ( 1.68%), Legrand SA ( 1.30%).

Among the shares showing a decline, one can highlight: Kering SA (–7.96%), Hermes International SCA (–4.13%), Stellantis NV (–3.91%), Teleperformance SE (–3.68%).

Support and resistance

On the daily chart, quotes continue to correct, approaching the support line of the channel with dynamic boundaries of 7600.0–7230.0.

Technical indicators are once again strengthening the local sell signal: fast EMAs on the Alligator indicator remain below the signal line, maintaining a narrow range of fluctuations, and the AO histogram, being not far from the transition level, forms correction bars.

Support levels: 7310.0, 7110.0.

Resistance levels: 7415.0, 7620.0.

Trading tips

If the asset reverses and continues declining, and the price consolidates below 7310.0, short positions can be opened with the target at 7110.0. Stop-loss — 7400.0. Implementation time: 7 days and more.

In the event of a reversal and continued growth of the asset, as well as price consolidation above the resistance level of 7415.0, long positions with a target of 7620.0 and a stop-loss of 7330.0 will be relevant.