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.
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.
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