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Is a recovery about to be seen on the DAX?


DAX Xetra (cash index)

The bulls responded well yesterday to put a  positive session in and now they will be dreaming of a recovery.

This was the most positive candlestick on the DAX for two weeks, coming with a decisive positive body to the candle and 90 ticks higher on the day.

Now this move needs to be followed by further gains today and hopefully another positive candle.

The early move is one of consolidation but considering the huge selling pressure of the past couple of weeks, this is certainly a start.

The big tests lie overhead though, with the resistance of the overhead supply between 11,726/11,865.

How the market responds around here will be a real indication of whether the bulls have anything about them in this recovery and will simple be blown away again amidst a wave of renewed selling pressure.

The momentum indicators are looking to bottom, but so far have no sustainable recovery (buy) signals, so it is too early to go on anything on the daily chart.

However, on the hourly chart there is more of a positive signal, with bullish divergences on hourly RSI and hourly MACD lines.

  • A move above 11,700 would also be a positive  sign technically (even if there is much bigger resistance at 11,726/11,865).
  • Support is in place now at yesterday’s low at 11,459, with another higher but less important support to watch at 11,552.

Holding above these levels today, especially with a positive close/candle would be a good start for the bulls after a painful couple of weeks.

 


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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.