DAX Xetra (cash index)
After an extraordinary session yesterday the outlook for the medium term improvement on the DAX is now under pressure.
Having looked set initially to push for a breakout above 12,600 early in yesterday’s session, an intraday sell-off posted a negative candle and now with early weakness again today the bears are beginning to gather momentum.
An initial break of the breakout support at 12,460 has been seen today and if this is confirmed by a move below the reaction low at 12,375 then the bears will begin to find some traction in a resumption of the correction.
Momentum indicators are reflecting this increasing deterioration, with the Stochastics having crossed lower, the RSI rolling over around 60 and the MACD lines also looking as though they have lost their momentum.
The hourly chart shows the market is on the brink, with the MACD lines threatening to turn negative, however the sellers are close to gaining control.
This is reflected in the hourly RSI which is beginning to breach 40.
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