DAX Xetra (cash index)
As the market looks to stabilise this morning, can the bulls start to rebuild for a sustainable recovery once again?
The outlook on the daily chart looks rather precarious as although there was a rebound from around the early March low on Friday, there is still considerable overhead supply to overcome. Initially this means breaking through a pivot around 12,000 which has been building over the past six weeks.
Although the market has opened higher today, unless this pivot can be breached then it will still just look like a dead cat bounce.
Momentum indicators retain a deteriorating configuration with the MACD lines crossing lower and the Stochastics accelerating.
On the hourly chart there is more of an improvement that the bulls can point towards, with two tests of the 11,830 low seen on Friday actually holding fairly well (the traded low was 11,819). This leaves the prospect of a small positive divergence on momentum and the Stochastics on the hourly are threatening a bull cross that would improve the immediate outlook.
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