Since the beginning of the year the index fell more than 5.0% and last week lost more than 1.5%.
The CAC40 is in a recovery phase since the beginning of March 2016 plus is trading above the 10 and the 200-week moving averages.
Last week the index fell with a narrow range and closed near the low of the week, in addition managed to close below previous week low, suggesting a strong bearish momentum.
The Stochastic is showing a strong bullish momentum and crossed above the 50 mid line.
Expecting a downward move to 2015 low at 4,225 (scenario 1) on a break below the previous week low at 4,321 or a bounce from a key level at 4,225 could push the index up to a weekly resistance at 4,518 (scenario 2).