Shares jumped higher on Tuesday in Europe, following a positive trading session in Asia overnight as traders digest the swathe of monetary responses from governments and central bankers around the world. An equilibrium price may be in sight on most markets as bearish trends seem to be slowing down with the price and technical indicators diverging. Market volatility is also noticeably lower this week compared with last week but remains unusually high while directionality is waning as investors still hesitate between “buying the dip” and limiting their exposure to risk assets. Globally, it is good news to see more price stabilization on share markets after the worst sell-off since 1987. However, the current recovery attempt will need to be supported by further leverages for the gains to be sustained. Investors welcomed the global monetary response from central banks but now expect more on the fiscal side as packages from different economic areas are on their way.
All the European benchmark are trading higher with the best performance coming from the IBEX-35 in Madrid. The market is currently trading near the 6,200pts zone following a rebound over 5,820pts yesterday. Prices are still within their short-term bearish channel but bullish divergences between the market and the RSI indicator may announce a trend invalidation to come. The market will however have to clear 6,555pts in order to unlock further bullish potential towards 7,000pts and 7,370pts on a short-term basis.
