Since the beginning of the year the French index gained almost 1.5% and continues in a bullish phase since early November.
Last week the main French index rallied with a wide range breaking above the 2016 high and closed near the high of the week, also managing to close above the previous week high, which suggests a strong bullish momentum.
The stochastic is showing an extreme overbought market although is still displaying bullish momentum.
Expecting an upward move to a key level at 5,010.5 (scenario 1) on a break above the previous week high at 4,928.5 but a bounce from a weekly resistance at 4,975.0 may trigger a sell-off down to a weekly support at 4,598 (scenario 2). However, a break below the previous week low may set in motion a bear run down to a weekly support at 4,598 (scenario 3).