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Disappointment for the bulls as the DAX sells off again


DAX futures (Mar 2018 contract FDXH8, continuation contract is FDXc1)

 

The reaction on the DAX to the long awaited breakout above resistance seems to reflect how difficult trading conditions are at the moment.

A decisive closing breakout above 13,238 resistance earlier this week has been followed by an enormous retracement to entirely unwind the bull break.

The fact that this was the reaction to a breakout that had been so hard to come by is a really tough blow for the bulls.

A breakaway gap at 13,135 was closed yesterday as the market posted a huge strong bear candle in a move that has continued lower today.

  • We now see the support at 13,000 being tested today and a closing breach would incredibly re-open the old range lows again at 12,810.

Momentum indicators have taken a significant shift back to deteriorate with the RSI at a two week low and suggesting that 13,000 will be breached, whilst the Stochastics have decisively crossed lower again.

  • The hourly chart shows initial resistance at 13,095 under a band of resistance now in at 13,120/13,185.

Hourly momentum indicators show a negative configuration and rallies now a chance to sell.

 


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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.