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DAX sells off again as another meek rally fails


DAX Xetra (cash index)

After a rebound earlier in the week, the bulls briefly had a glimmer of hope, but that seems to have quickly been extinguished as the selling pressure seems to be resuming.

The old support around 11,000 is significant overhead supply and so it seems to have been as the initial positivity which drove the market to yesterday’s high at 10,988 has been sold into.

A negative candle yesterday and a gap lower today from 10,887 has been met by the meek recovery in momentum indicators beginning to tail off again.

Rallies on the DAX remain a chance to sell.

  • Filling the gap at 10,887 is a possibility but a close back below 10,800 would be a negative signal and certainly re-open the low at 10,585.
  • The long term downside target from the huge top pattern completed below 11,726 implies 10,150.

On the hourly chart there is a bear cross sell signal on the hourly MACD lines around neutral, whilst the RSI failed at 60, both concerning factors if you are a bull.

At the very minimum, the bulls need a close above 11,000 to improve the outlook now and in the absence of this the DAX will remain under huge pressure.

 


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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.