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DAX consolidates but have the bulls lost their impetus?


DAX Xetra (cash index)

The DAX continues to sit patiently at this crossroads of the resistance band 12,400/12,500 with the break in the coming days likely to be a key, outlook defining, move.

As the rally has moved over the past week, the bulls have gradually been losing their impetus.

Despite a positive candle on the day yesterday, the market closed with just a 1 tick gain and this consolidation has continued today.

This comes as momentum indicators just curb their recent recovery but the concern is that both the RSI and Stochastics are struggling in the mid-40s which runs the risk that this is a rally to be sold into.

  • The resistance band of the overhead supply between 12,400/12,500 has limited the rallies in the past two sessions, with intraday moves higher failing in this range.

Concern would grow if the market now starts to post negative candles and the resistance of the three week downtrend (falling at 12,480 today) is an ever growing issue as well.

  • The hourly chart shows this consolidation, but a decisive move below the support at 12,312 would increase renewed corrective pressure.
  • Initial support at yesterday’s low of 12,345.
  • Resistance at 12,439 from yesterday’s high.

 


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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.