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An unwinding correction in the uptrend is a chance to buy DAX


DAX Xetra (cash index)

The bulls have failed to build on a decisive positive daily candlestick, but there is still a positive outlook on the DAX and weakness remains a chance to buy.

Another break to multi-month highs yesterday took the market into the 11,725/11,865 key long term resistance band of the old 2017/2018 floor which is now overhead supply.

This means that this is a key crossroads moment for the DAX.

Momentum indicators are set up positively even though there has been a tick lower on RSI and Stochastics from their strong configuration.

There is an uptrend of the past five weeks at 11,620 today and is a basis of support for any slip back.

  • The intraday move lower gapped below the 11,725 pivot this morning, but there is near term support between 11,625/11,677 as a buy zone.

This is an unwinding move in the trend higher and is still likely to be seen as a buying opportunity.

The main caveat to this would be the FOMC decision tonight which could change sentiment on a hawkish surprise, however in the absence of this there is a continued recovery outlook on the DAX.

  • With initial resistance at 11,772 and yesterday’s high of 11,823 a close above 11,865 would be the key bullish breakout and open the next resistance around 12,450.

 


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At Hantec Markets Ltd we provide an execution only service. Any opinions expressed by analyst Richard Perry should not be construed as investment advice or an investment recommendation. This report does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. Forex and CFDs are leveraged products which can result in losses greater than your initial deposit. Therefore you should only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such transactions.