Major stock markets are opening the new year on a positive note, with the S&P 500, the FTSE 100, and the Dax 40 all exhibiting gains

FTSE 100 DAILY CHART

FTSE 100 eyes September and December highs

The FTSE 100 starts the new year on a stronger footing, targeting its September and December highs of 7,747 to 7,769 despite a mixed session in Asia. As long as Thursday’s low of 7,705 holds, upward pressure should be maintained, with the 7,747-7,769 area providing upside targets ahead of 7,800.

A break of 7,705 would likely set up a retest of the October high at 7,702, below which the November-December uptrend line at 7,676 is in evidence.

DAX 40 DAILY CHART

DAX 40 starts the new year on a positive note

The DAX 40 is targeting recent highs of 16,809 to 16,812 ahead of the latest German PMIs. A break above this level should bring the December record high of 17,003 back into focus.

Support below Thursday’s low of 16,686 lies at the 20 December low of 15,595. Only if this low were to give way would the July high of 16,532 be back on the map, but should provide support.

S&P 500 DAILY CHART

The S&P 500 has started to show negative divergences on the daily chart, as it has risen for nine weeks in a row and is overbought. It is showing the first signs of a potential topping out, which could happen within the next few months, at 4,817.

The S&P 500 index has been trading above its 70% overbought level, and the possibility of a correction lower is currently high. The index could fall through the October to January uptrend line and the low of December 20 in order to reclaim the 4,692 level. Resistance is located at the high of 4,778, which was the peak of the market’s last week’s rally.