(Bloomberg) -- The credit rally that has pushed company bonds up 6.4 percent in Europe since the end of January may flounder because it’s reaching a resistance level, a technical indicator shows. The Markit iBoxx Coorate Non-Financials index is at the halfway point between the high reached in February 1999 and the low in November last year. The 50 percent mark is a resistance level in a Fibonacci analysis and failure to break through signals the gauge may fall.“This is a very strong retracement,” said Mark Sturdy, a technical analyst at London-based research firm Seven Days Ahead. “I’d be amazed if it goes through without considerable resistance.”
Technical analysts look at price charts to forecast resistance levels, or ceilings restricting further price increases, and support levels, or floors limiting declines.
Fibonacci analysts use a system pioneered by 13th century mathematician Leonardo Pisano, known to his friends as Fibonacci, who discerned ratios from proportions found in nature. The analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low.
No comments:
Post a Comment