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Building from support, DAX bulls again look to breakout

DAX Xetra (cash index)

A completed turnaround of sentiment as yesterday’s session progressed has put the bulls back in the driving seat and suddenly the market is breaking higher again.

For over a week the market has been drifting back from the prospect of a crucial closing breakout above 12,600 as the bulls have consolidated.

However it was key that breakout support at 12,460 held firm yesterday and the market subsequently completed a bull hammer.

Although this came at the bottom of only a short corrective move, it is still significant in the reflection of where the bulls see corrective moves.

With early gains pushing the market above the key February high at 12,600 once more today, a closing breakout would be a key sign that the bulls are ready to push forward.

The strength of the momentum on the daily chart is key with the RSI above 60, MACD lines rising and Stochastics strong.

  • A move above 12,640 would then mean that yesterday’s low at 12,466 would be another higher low with the strength of the support band 12,460/12,600 growing ever more important.

The hourly chart shows the momentum indicators of the bulls using weakness continually as a chance to buy with positive configuration on the hourly RSI and MACD lines.

  • Above 12,640 the next resistance is  12,745 and then around 13,000.

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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.