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Corrections within the DAX consolidation still a chance to buy

DAX Xetra (cash index)

Consolidations within the recovery have tended to be seen as a chance to buy for the next bull leg higher and there is little to suggest this is not once more going to be the case.

Recovery remains on course to test the old key long term breakdown which is significant overhead supply between 11,725/11,865.

However, the DAX has stalled slightly since breaking decisively higher through the 11,567 resistance on Friday, posting a high at 11,677 as the market has drifted back towards the breakout again.

This is a situation that has been seen on numerous occasions throughout the recovery and should be the source of the next buying opportunity.

This comes with momentum indicators still strongly configured, with the RSI in the high 60s, MACD lines rising and Stochastics still positive.

  • The reaction to the early slip lower at the open today is encouraging for the bulls, rebounding off 11,570, however effectively there is now a buy zone between 11,416/11,556.

The hourly chart remains positively configured with RSI continually bottoming between 40/50 and MACD lines positive above neutral.

  • A move above 11,677 would open the test of the long term pivot band 11,725/11,865.


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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.