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Can DAX bulls follow Wall Street to ignite a recovery?


DAX Xetra (cash index)

In the wake of Wall Street’s Powell driven rally yesterday, the DAX has begun the day on the front foot, but is this a move to signal a determined shift in outlook?

The market has been consolidating for the past few sessions under the resistance of the near to medium term pivot band 11,400/11,460 however this consolidation has now decisively broken.

This has come with what is now an improving outlook on momentum indicators.

The Stochastics are tracking higher (although arguably not decisively) whilst the MACD lines are accelerating higher and the RSI is pushing to eight week highs.

The RSI pushing decisively above 50 would be a signal to take notice of now.

However the key move for the bulls would be above this pivot band 11,400/11,460 and if this is not seen now (given the strength of the Wall Street bounce) then would this be seen as a disappointment?

  • A close above 11,460 opens 11,567/11,690 highs from early November and the old key long term overhead supply 11,725/11,865 would come back into play.
  • Support at 11,265 is growing and the fact that the market has barely even contemplated filling the gap at 11,205 suggests this could even be the “breakaway gap” of a decent recovery.

 


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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.