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DAX increasingly building consolidation with pivot support key


DAX Xetra (cash index)

The recovery of early January has turned into a phase of consolidation now as the overhead supply around 11,000 has prevented the bulls from gathering a head of steam.

This comes with momentum indicators rolling over at levels that will be concerning for the anyone invested in continued recovery.

In early December the RSI failed at 53, and this time is struggling at 52; whilst the big renewed sell-offs of the near term rallies of recent months have all been signalled by Stochastics sell signals similar to the one forming now.

  • However, the support initially at 10,788 helps to protect the more important near term pivot band 10,585/10,700 and whilst these levels remain intact then the bulls will still be confident of a test of 11,000.

The hourly chart shows a near term slip but seems to just be an unwinding move.

A move below 40 on the hourly RSI would be a concern though.

  • Initial resistance at 10,898.

 


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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.