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Intraday rallies on DAX now seen as a chance to sell


DAX Xetra (cash index)

Three consecutive negative closes have come with the selling pressure having significantly accelerated as risk aversion has spread across global markets.

There is a mild consolidation early this morning, but there is little to suggest that a recovery of any substance is near and subsequently any near term rebound will likely fall over for a retreat towards a test of the September low at 11,865 in due course.

Yesterday’s big bear candle was entirely below the previous pivot support around 12,100 which is now a basis of resistance.

Momentum indicators remain negatively configured but also with further downside potential, with the MACD lines only just having crossed lower under neutral, whilst the Stochastics continue to track lower towards bearish configuration.

  • Yesterday’s low at 11,938 is initial support and the market has ticked higher today, however the hourly chart shows this is simply an unwinding move with hourly momentum a touch stretched.
  • There is resistance around 12,000/12,050 and then the overhead supply around 12,100, whilst the hourly RSI fails around 50/60 and hourly MACD lines now fail under neutral.

Intraday rallies will be seen as a chance to sell now.

 


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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.