DAX Xetra (cash index)
A strong session added almost 200 ticks to the DAX yesterday, posting a strong bull candle and the market now stands on the brink of a crucial breakout.
The original rebound from the sharp February sell-off saw the market failing at 12,600 and this has been key resistance ever since.
However during yesterday’s gains the market saw an intraday breach of this resistance.
Although failing to hold the gains into the close the market is again testing higher this morning and a closing breach would complete a remarkable turnaround for the outlook that has built over the past three weeks.
Daily momentum indicators are increasingly strong, with the RSI now pushing into the 60s, MACD lines rising above neutral and Stochastics strongly configured.
This suggests the continuation of the uptrend recovery gains with weakness being bought into.
The hourly chart shows positive configuration as the market looks to push higher, however could be a touch stretched in the immediate outlook.
This could result in some sort of unwinding consolidation, with recent higher lows coming just under previous breakout levels.
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