After setting new records this week, the CAC 40 index now seems to be stumbling over the technical barrier of 8250 points, a benchmark closely watched by investors.

Jérémy Delsol, head of macroeconomic and market analysis at online broker Admirals France, believes that this threshold - which he was one of the first to mention - could trigger a consolidation phase until the horizon clears further for the Paris market.

Cercle Finance: After a gain of 20% since the end of October, is the upward momentum set to continue on the Paris Bourse?

Jérémy Delsol: From a fundamental point of view, France is not doing so well, as shown by the latest IMF projection, which expects growth of just 0.9% in the Hexagon in 2024. Interest rates remain high, and the cost of debt is becoming increasingly onerous.

At the same time, the unemployment rate has risen to 7.5% by the end of 2023, while the all-in unemployment rate, which takes into account those in the unemployment halo, takes us to 16.7%.

What's more, the number of corporate failures has returned to a level not seen since 2010!

Finally, the rating agencies are due to review their ratings of France shortly, with a risk of downgrading.

Yesterday morning, the French PMI composite index (i.e., taking into account both the services and manufacturing sectors) came out in negative territory, below its previous data and even below consensus, which is also a very bad sign.

All this to say that the rise of the moment resides solely in a few driving forces, which are enough for the Paris Bourse to set new all-time highs! These factors are the CAC heavyweights (LVMH and Hermès) and the forthcoming ECB rate cut.

That said, as the saying goes, the trend is our friend until it stops, which means that as a trader and investor, I play the trend until proven otherwise. But the nuance will now lie in managing opportunities, bearing in mind that partial profit-taking could play a key role.

CF: Does your short-term target of 8250 points still hold?

JD: The 8250-point zone was tested yesterday to within six points, and this threshold remains, in my view, the key level for the moment. In fact, yesterday's opening session saw a clear rejection of this resistance.

CF: What are the next resistance thresholds on the horizon?

JD: In addition to the 8250-point barrier, which remains the obstacle of the moment, the psychological 8500-point threshold is on the horizon, although in the longer term the 8700-point resistance zone seems relevant to me.

CF: What are the drivers likely to sustain the CAC's upward momentum?

JD: If the good performances of the heavyweights continue, and if we get no indication from the ECB to the contrary on the timing of the rate cut, the craze could be prolonged, but in view of yesterday's PMI data we can ask ourselves whether the time has come for a correction in the index.

CF: On the other hand, have you identified any possible supports on the downside?

JD: On the support side, I'm watching the 7950-point zone, before the 7750-point zone.

CF: A target level to start taking profits?

JD: For me, the 8250-point threshold already represented a management point, i.e. a point where partial profits could be taken. In addition to this level, we can remember the key resistances already mentioned above.

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