DAX Xetra (cash index)
Reaction to, not only yesterday’s slip back, but also the renewed escalation in the trade tariffs have significantly bolstered the improving outlook.
We talked yesterday about the reaction of the bulls being a key gauge, and they have really hit back with a decisive response.
The opening gap lower yesterday was closed and a positive candle on the session (a close 40 ticks above the open).
And now the market has pushed out to a two week high today to continue the move higher.
A close above 12,130 today would be a strong bull signal.
The momentum indicators are decisively improving now, with the RSI and Stochastics tracking higher, whilst the MACD lines are also set to confirm a bull cross (only the third since the March low, each of which have been the precursor to strong rebounds.
The RSI tends to move into 55/60 area on these recovery phases too, so currently around 46 there is upside potential.
The next resistance is in the band 12,300/12,400.
Closing clear of 12,130 tonight means that 12,100/12,300 becomes a basis of support now.
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