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DAX key breakout opens the upside once more

DAX Xetra (cash index)

After a period of consolidation, equity markets have taken the lead once more and the DAX has broken sharply above the key pivot resistance.

Yesterday’s strong bull candle decisively broke above 12,600 which had been a basis of resistance and this now re-opens the upside.

There is now an uptrend channel formation of the last two weeks that is pulling the market higher which is around 320 ticks in depth.

With yesterday’s strong move and a gap higher at the open today, momentum indicators are turning positively configured again.

The RSI confirms the breakout and is rising above 50 at near five week highs, whilst Stochastics are strong and it now just needs the MACD lines rising above neutral (which is close) to complete the set.

  • The breakout at 12,600 is now a basis of support for any unwinding move and initially support is with the gap open at 12,689 (which ideally needs to be filled).
  • The hourly chart shows support is 12,600/12,640 and intraday weakness is now a chance to buy.
  • Initial resistance at 12,760 has already been broken today and the top of the channel is at 12,865 today, whilst the key resistance is now not until above 13,000 at 13,204.

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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.