The Stoxx Europe 600 Index (SXXP) has reached a “pivotal” level and must close above 291 if the benchmark gauge is to extend its longest winning streak of monthly gains since 1997, according to Whitman Howard Ltd.
The Stoxx 600 was bound last week by a “narrow zone of key resistance” between 289.5 to 291 and closed little changed for the period. The gauge fell for a second day today, losing 0.2 percent to 288.52 at 3:07 p.m. in London.
“Investors have essentially reached decision time,” Geoff Wilkinson, a technical analyst at Whitman Howard in London, wrote in a report to clients. “Upside progress for European equities remains entirely dependent on closing above these key levels. We currently remain firmly in the sell zone here from a vanilla risk-reward perspective.”
The Stoxx 600 has climbed for nine consecutive months through February bolstered by European Central Bank President Mario Draghi’s pledge to save the euro and as U.S. lawmakers reached a budget compromise on Jan. 1. The measure has climbed 3.2 percent so far this year, reaching a 23-month high of 290.3 on Jan. 29.
In technical analysis, investors and analysts study charts of prices and volume to predict changes in a security, commodity, currency or index.
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