* FTSEurofirst 300 index rises 1.1 percent
* Indexes rebound after hitting "oversold" levels
By Atul Prakash
LONDON, Feb 6 (Reuters) - European equities bounced back from oversold technical levels on Thursday after a sharp two-week drop, with reassuring earnings from major companies Alcatel-Lucent and AkzoNobel boosting their shares.
Charts the euro zone's blue-chip Euro STOXX 50 index rebounded after its 9-day relative strength index (RSI) slipped to 26 in the previous session. A level below 30 is considered "oversold" and often attracts buyers.
The index was up 1.2 percent at 2,998.21 points by 1132 GMT, while the pan-European FTSEurofirst 300 index rose 1.1 percent to 1,285.91 points after its RSI fell to 27 on Wednesday.
"It's very likely to see a short-term stabilisation in the market as we have seen an 'oversold' situation and the Euro STOXX 50 index is nearing some important support zones," Thorsten Grisse, technical strategist at Commerzbank (Xetra: CBK100 - news) , said.
"It does not mean that the recent consolidation process is over, but from a medium-term perspective, we are still in a fine bull market."
Buying was supported by data from the fourth-quarter earnings season, which has gathered pace in Europe.
Alcatel-Lucent surged 11.5 percent in heavy volumes after the telecom gear maker posted forecast-beating gross margins and operating profit, prompting hedge fund short sellers to unwind negative bets on the stock.
According to data from Markit, about 9 percent of Alcatel's shares are out on loan, up from 6.3 percent in mid-December, making it the most shorted stock on France's CAC 40. Short selling involves selling borrowed shares in the expectation of being able to buy them back more cheaply later.
AkzoNobel rose 7.3 percent, the second-biggest gainer on the FTSEurofirst 300 as the Dutch paints and chemicals firm reported higher-than-expected earnings and hoped to meet its 2015 targets.
Trading volumes of Alcatel-Lucent and AkzoNobel were 185 percent and 202 percent of their 90-day daily average, against 44 percent for the FTSEurofirst 300.
"The earnings season has been mixed. Possibly we will some easing of the downward revisions to 2014 earnings estimates, but we have to be aware that a double-digit earnings growth this year is a little bit ambitious," said Gerhard Schwarz, head of equity strategy at Baader Bank (Xetra: BWB.DE - news) .
"We have seen a hefty decline (in European shares), but overall we should not be too much worried because the fundamentals of the market have not changed much."
Investors awaited a European Central Bank meeting for the market's near-term direction.
Following a recent surprise fall in inflation, pressure has risen on the ECB to ward off the risk of the euro zone slipping into deflation. The Bank of England kept rates unchanged at its policy meeting.
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