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DAX bulls gathering but consolidation needs to break

DAX Xetra (cash index)

A sideways drift that developed over the past week on the DAX continues to consolidate the market but have the bulls lost control.

The fact that the market continues to trade well within the now six week uptrend channel whilst also holding on to strong configuration on momentum indicators bodes well for the eventual continuation of the bull run.

Support has been left at higher levels for several weeks now and since breaking above 12,600 even the near term breakouts have become supportive.

  • Subsequently the support at 12,827 remains intact as the market has consolidated recently, with a pick up from 12,918 yesterday.
  • There is a move back towards 13,000 again today and the bulls will be considering the recent high at 13,034 as possible (even though the average true range has declined to 106 ticks now).

The hourly chart shows that momentum has simply been unwinding to buying opportunity levels, with the hourly MACD lines back to neutral and the hourly RSI holding up above 40.

  • A move above 13,034 opens 13,140.

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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.