Short term
Trade view / 13 June 2016 at 5:26 GMT

EU50's short-term bounce will end up lower

Instrument: EU50.I
Price target:
Market price:

The bears made the most out of last Friday as the EU50.I and other markets were pushed lower with full force down into key support at the 2,900 level. I in late hours it even managed to test the key pivot at 2,890, something that before the end of the week didn't look likely.

The brutal price action we experienced Friday is most likely to have been a wave three decline rather then anything else, part of the cycle that started on May 31.

If the tape is bearish, the current decline should now last for at least 18 or 19 trading days giving us the end of this week as an important inflection point.

From a price perspective for the bearish outlook to hold, a short-term oversold bounce should not be able to establish itself above 2,944, if that were to happen something else is likely going on.
A break below 2,890 following a bounce would be a fairly clear signal of further declines into support pivots at 2,863, 2,836 and 2,808.

Management and risk description

The plan for this week is to sell one half upon stalling price action below the 2,944 pivot and another half upon a break of the 2,890 pivot following an oversold bounce. 

The risk to this setup is established price action above 2,944, which would signal a bullish tape.


Entry: Sell on half upon bounce failure into 2,944 and one half upon a break of 2,890 following an oversold bounce

Stop: Established price action above 2,944

Target: 2,863, 2,836 and 2,808

Time horizon: This week

EU50.I daily chart
EU50.I daily chart
EU50.I hourly chart
EU50.I hourly chart
EU50.I daily development chart
EU50.I daily development chart Source: All charts, Saxo Bank - create your own charts with SaxoTrader. Click here to learn more 

— Edited by Adam Courtenay

For more on equities click here         

Non-independent investment research disclaimer applies. Read more
Johan Berntorp Johan Berntorp
The 2890 level was broken today but was re-tested. From there 2 862 held up for a while and now 2 836.
Johan Berntorp Johan Berntorp
Would expect this assumed wave four bounce to fail at one of the pivots, 2 836 and than possibly 2 862.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail