STOXX 600 Index Breaks Out to New High, Supporting Broad-Based Exposure to European Equities
The STOXX 600 Index, Europe’s equivalent to the S&P 500 Index, recently reached a new 52-week high. This breakout was driven by strong earnings from LVMH Moet Hennessy Louis Vuitton. The breakout is seen as a positive technical catalyst and suggests that having exposure to European equities is beneficial.
iShares MSCI Core Europe ETF Shows Positive Momentum After Recent Pullback
The iShares MSCI Core Europe ETF (IEUR) experienced an upward shift in momentum indicators following last week’s upmove. This indicates that the ETF has emerged from its recent pullback. Additionally, the long-term trend for IEUR remains bullish as it is supported by positive intermediate- and long-term momentum.
Potential Breakout and Targets for IEUR
If IEUR manages to break above resistance levels near $55, it could target final resistance near $60. This would likely lead to increased momentum. However, if IEUR breaks below support from the weekly cloud and the 200-day moving average (around $52), it could invalidate the bullish setup.
Improved Relative Strength of IEUR Compared to S&P 500
While there is a long-term downtrend in place for IEUR compared to the S&P 500, the ratio of IEUR versus SPX is showing signs of downside exhaustion according to the DeMARK Indicators. This suggests improved relative strength in the near term.
Hot Take: Positive Outlook for European Equities Supported by Technical Indicators
The breakout of the STOXX 600 Index and the positive momentum indicators for IEUR indicate a favorable outlook for European equities. With resistance levels potentially surmountable, there is potential for further upside. However, caution should be exercised if support levels are broken. Overall, the technical indicators suggest that having broad-based exposure to European equities could be advantageous in the current market conditions.
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