DAX Xetra (cash index)
The potential for a near term technical rally forming is still developing, but rather than a “V” shaped bounce, it could be a slow burner of a recovery.
I have been discussing for a couple of days now whether the DAX was stretched and due a rebound and there are signs that the selling pressure has abated in recent sessions.
However it does not currently look as though the bulls are ready to really push ahead with a move higher.
Yesterday’s positive session was encouraging but failed to ignited with an intraday pullback from 12,039 and a close back below the psychological 12,000 level once more.
This is reflected in the initial composition of the candle today, which has the current price below the open and little traction in the move higher.
Momentum indicators are showing that a bounce is still progressing, with the Stochastics having now crossed higher (not confirmed in a bull cross yet) and RSI picking back up from 30.
The hourly chart is more positive for a technical rally, with a move to leave higher lows and momentum more positively configured.
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