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Bulls in control, but can the DAX break above key resistance?


DAX Xetra (cash index)

In the wake of a break to the highest level on the DAX since October, the market is finding consolidation setting in.

The importance of this consolidation is elevated on consideration that the market hit 11,725 on Friday which is the bottom of the long term pivot band 11,725/11,865 at which point the bull move has stalled.

At this stage this consolidation is just a pause in the run higher, as there is a continued positive bias to momentum which suggests that buying into weakness is the strategy.

As things stand, yesterday’s mildly corrective candlestick has not been followed through this morning, as a rebound has kicked in.

However, until the market trades decisively through 11,865 there will be question marks on the rally.

The uptrend of the past five weeks continues to run higher and is supportive today around 11,600.

  • On the hourly chart, the moves in the past few sessions mean that there is now a support band 11,625/11,675 as a near term buy zone, with the hourly RSI holding above 50 and MACD lines positively configured.
  • A break above 11,725 on a closing basis would be another positive step forward for the bulls.

 


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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.