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DAX bulls fighting to hang on to a recovery outlook


DAX Xetra (cash index)

The recovery is tentatively intact this morning as the DAX has consolidated in early moves.

Although the market closed higher on Friday this tells very little of the story where the market closed 170 ticks from the day high down at the low of the session to form a very negative looking candle.

  • This means that there is pressure on the recovery uptrend of the past week and the support band between 11,445/11,500 is in clear focus as a key near term floor.

As the momentum indicators have recovered in the past week there has been growing encouragement for the bulls, however this could still simply be an unwinding move that flickers out and is used as a renewed chance to sell.

  • A break back below a historic support at 11,400 would therefore confirm the renewed selling pressure was back in force.

The hourly chart continues to show intraday corrections are being bought into, and for now the momentum indicators are positively configured to reflect this.

However, the hourly RSI below 40 would be a warning to this position, and already the recovery uptrend is being pressured this morning.

  • Friday’s high is initial key resistance at 11,690 with the resistance band 11,726/11,865 still key overhead supply that the bulls need to clear out in order for a recovery to be sustainable.

 


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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.