DAX Xetra (cash index)
The outlook remains positive following the breakout above 12,600 and with the trend channel of the past few weeks remaining intact, corrections are a chance to buy.
An upside gap at 12,688 was closed yesterday so the reaction in today’s session will be important.
For now this is a near term bullish correction, however the importance of the support band 12,600/12,640 is significant now.
A successful building of support in this area will be a strong indication that the bulls are ready to push forward in the recovery.
However should the support and the uptrend channel (today at 12,615) fail then the bulls will have lost the impetus of the breakout.
Momentum indicators are at key levels too, with the RSI needing to hold above 50 and the MACD lines having only unwound to neutral.
So this is a key moment on a medium term basis.
The hourly chart also shows the positive configuration remains and this is a correction to be seen as another opportunity to buy into.
Can the bulls reclaim control?
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