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DAX falls within the uptrend channel, bulls are waiting


DAX Xetra (cash index)

As has so often been the case in recent weeks, the bulls have struggled to decisively build following an upside breakout, as a period of consolidation has again followed.

However, is this another chance to buy?

Since breaking above the former resistance at 12,780, the market has consolidated back from 12,887 towards the breakout.

A couple of corrective candles has seen the market slip back but this is all playing out within the four week uptrend channel, as it has done on several occasions in the past few weeks and each time previously, the corrective moves have been bought.

Yesterday’s intraday bounce from 12,740 pulled the market back above the 12,780 breakout again into the close, but this level is again being tested today and the slip back within the channel may still have more weakness to go yet.

  • The support at 12,740 will be watched now, with the channel support at 12,650 today.

Momentum indicators are just sliding back within a strong medium term configuration, but it is worth watching the Stochastics which have just crossed lower.

  • A close below 12,740 would open the bottom of the channel and the old pivot around 12,600.
  • Resistance is initially with yesterday’s high of 12,860 under the 12,887 high.

 


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Research Risk Warning

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.