Buy EuroStoxx50 Put Options As ECB Holds Off On Aggressive QE
Feb, 08th 21:12
Europe’s leading Blue-chip index EURO STOXX50 has been in a slump due to jitters in the global economic environment propelled by the sluggishness in Chinese economic growth, tumbling Oil price and growing concern about the timing and effects of the next FED rate hike. EURO STOXX 50 started selling off strongly after The ECB decided to extend the asset purchasing program until March 2017 at least but didn’t announce expansion of the QE program any more than that, which on balance seems to have disappointed investors greatly.
Fig: EURO STOXX 50 Daily Technical Chart
EURO STOXX 50 has been strongly bearish since December, 2015 as it has dropped about 20.50 percent over the last three months. On the daily chart, it is moving lower, within a well established downward sloping price channel. The Price is below the 50 day and 200 day moving averages on the daily and weekly charts. The immediate resistance on the daily is at 3057.8. Currently the market has broken the previous 16 month low at 2780.9 and is heading towards the 30 months low at 2712.00. A breakdown of his critical support might lead it towards the 32 month low and strong support at the 2490.5 level.
Sell on a break and close below 2711.00 with a Stop Loss at 2730 and Take Profit at 2630.0