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New highs for the DAX, but can it continue higher?


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

Breakout on the DAX!

The positive sentiment sweeping across global equity markets has driven DAX futures to a new all-time high as the market moves above the key November high of 13,525.

This comes with momentum indicators finally suggesting that the market is breaking the shackles of the false moves of recent months.

A bull kiss on the MACD lines, Stochastics rising strongly and RSI into the high 60s reflects the positive momentum but also with upside potential.

The next move is for the two key old resistance levels to become a basis of support between 13,422/13,525.

On the hourly chart there is a trend channel higher over the past week, and means that intraday corrections are now an opportunity to buy.

  • There is initial gap support at 13,515, with today’s traded low at 13,545 initially supportive.
  • As for upside targets, taking the mid-January as a bull flag/falling wedge breakout implies an upside target of around 13,815.
  • For confirmation the bulls would be looking for a closing breakout above 13,525 support today and a solid session tomorrow.

Treatment of the gap breakout could also be a key factor.

 


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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.