DAX Xetra (cash index)
Despite the market breaking through the 8 month downtrend this week, there has been a slip back on the DAX in the past couple of sessions, but this move should prove to be the source of the next chance to buy.
The breakout at 11,371 is a basis of support and underlying demand now, with momentum indicators still positively configured and pointing towards corrections being an opportunity for the bulls.
An unwinding move is coming through on the RSI (which is still above 60) whilst the Stochastics are also just moving into more of a consolidation phase.
We have consistently seen throughout this recovery that the DAX will go through a period of consolidation before breaking higher (only in a couple of sessions early in February was this not the case).
There is little to suggest at this stage that this consolidation will not once more be bought into.
Hourly momentum indicators are unwinding towards an area where the bulls have habitually been supportive, with the RSI around 40, the MACD lines around neutral.
The early drop back this morning has so far not developed into anything more than an unwinding move, and the bulls look ready for their next move, they just need a catalyst.
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