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Can the DAX continue to break through resistance?


DAX Xetra (cash index)

The outlook remains strong as the market consolidates the breakout above 13,000.

The trend channel continues to pull the market higher with a run of higher lows as consolidations are bought into.

With the latest breakout we see the initial resistance at 13,140 has capped the upside in the past couple of sessions and is clearly being watched.

It is interesting that although the DAX opened higher (playing catch up on yesterday’s strong run on equities having been on public holiday) but still the resistance at 13,140 held firm and the intraday move has turned back.

  • The breakout at 13,034 is initially supportive whilst the higher low at 12,918 is now a key reaction low within the trend channel.

There is a slight caveat with the momentum indicators which are beginning to show signs of potentially slowing down, with the RSI towards 70 and again testing the uptrend it has been in throughout the six week uptrend channel.

Despite this, for now, there is still a strong configuration which points towards buying into weakness but equally these momentum indicators need to be watched for the longevity of the bull run.

  • Above 13,140 opens next resistance at 13,300.

 


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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.