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DAX beginning to build support above old breakout


DAX futures (Dec 2017 contract is FDXZ7, continuation contract is FDXc1)

 

The sharp sell-off last week has now unwound to the top of the support band 12,900/13,090 of the old October trading band.

It is interesting to see that amidst the selling pressure of the end of last week, the support held on for two tests, whilst the market has opened higher today in a move that adds to potential that support is now building.

The broken 10 week uptrend means that the bulls have lost control, however if support can build at the old $13,090 breakout then the bulls can begin to gain a foothold in the market once more.

Momentum indicators are corrective near term following the sell signals of last week, however it is interesting to see the RSI looking to bottom at 50.

There is work that needs to be done however, with the hourly chart configuration still corrective.

Watch for the hourly RSI above 50 and MACD lines dragging back above neutral to suggest the bulls fighting back.

Other than that the rebound will simply be seen as another chance to sell.

  • Resistance at Friday’s high of 13,215 will be seen as an important near term level.
  • Friday’s low at 13,102 is initial support.
  • A close below 13,090 would continue the downside move.


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