Technical Weekly 04052007

Equities
Sellers tried to put some pressure on the equity markets but as you can see on the hourly chart of the DJ Euro Stoxx 50, the trend is still positive.
Most technical indicators are overbought and are turning negative but as long as the support is holding, I'm not turning bearish.

I think there are still opportunities in the market and that, stocks, sectors or regions picking is key.
For instance, the chart of UCB recently turns bullish and technically speaking the stock may reach 50 EUR in the coming weeks.

On the other way, Spain (IBEX) recently gave a technical sell signal.
Strong support exists around the 13.700 level.
What is worrying to us is that this index was leading in Europe and that the pattern could be big bearish double top with a target around 12450.(+/-14% decline)

Bonds
I think that the German 10 Year yield will continue to consolidate between the 4.1 and 4.25% level in the coming days.
Because of overbought status the yield needs a rest but I still expect another rise to the 4.5% level in the mid-term and may be to the 4.85% level which is the target of the ascending triangle.

Brent
Still trading up, a rebound on the lower trend-line channel (in green on the chart) could be the trigger for a rise towards the upper trend-line channel.
On the other way a break below the 65$ could jeopardize the bullish trend with a downside risk around 60$.

Euro
In the last weekly I said that my first target of 1.36 was already reached and that I do not believe that the next target (1.38) will be reached immediately because technical indicators were very overbought.
Now we can see that the MACD indicator (lower panel) is bearish which means that the pull-back is already occurring.
The first support is located around 1.35.