European shares edged higher on Friday morning on course for their sixth week of gains, with U.S. GDP figures and Greek debt talks firmly in focus and charts indicating more gains for equities after a recent breach of a strong resistance level.
Investors took money out of traditionally cyclical stocks and bought defensives. The STOXX Europe 600 Utilities index <.SX6P>, up 0.9 percent, was the best performer. Banks <.SX7P> and miners <.SXPP>, among the biggest gainers on Thursday, fell 0.3 percent and 0.2 percent, respectively.
At 1006 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.1 percent at 1,053.23 points after falling to a low of 1,046.44 earlier in the day. It gained 1.2 percent in the previous session, the highest since early August.
Charts showed that the recent bull trend was intact and the market had potential to scale new highs in the coming weeks.
The FTSEurofirst 300 index has reached levels where it is looking relatively overbought, but this should not necessarily be interpreted as a sell signal, said Bill McNamara, technical analyst at Charles Stanley.
The break through resistance at 1,028 has been followed by further upside and although there are plenty of headwinds, there is still no compelling evidence to suggest that a top has been reached. Volumes remain robust and the short-term uptrend is intact.
Koen De Leus, strategist at KBC Securities, said investors were a little cautious ahead of the U.S. GDP figures and the result of the debt talks in Greece.
If you get disappointing GDP figures, investors will take profits and European stocks could fall about 1 percent. If it's better than expected, you could see a gain of 0.5 to 1 percent.
U.S. GDP numbers, due at 1330 GMT, may cement the view that the U.S. economy is gradually recovering. In Greece, talks with its private creditors made progress on Thursday and they will continue negotiating on Friday. Athens needs a deal quickly to avert a chaotic default when a major bond comes due in March.
De Leus said that those investors, who have made a good profit, especially from financial and mining stocks, could consider taking about half of the money off the table.
This is not a 'buy and hold' market, but a 'hit and run' market.
(Editing by Erica Billingham)