DAX Xetra (cash index)
Despite the fact that the DAX is trading higher today, European equity markets are under increasing negative pressure.
This is reflected on the DAX which posted a huge bearish outside day/bearish engulfing candle in yesterday’s session which closed 195 ticks lower on the day and below the support at 11,400.
The recent run of sessions have been a swathe of broadly negative candlesticks, with only the occasional brief respite on rebound.
This latest early bounce should be another opportunity to sell.
Look at the bear cross on the Stochastics giving a sell signal, whilst the MACD lines are already tailing off now under neutral and the RSI recently failed under 50.
Rallies are a chance to sell.
Hourly momentum is now back in negative configuration and technical rallies are likely to now struggle for traction.
The one big caveat is a news driven risk rally on progress towards agreement on the Italian budget, but in the current outlook, further weakness is expected.
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