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Selling pressure mounts on DAX with intraday rallies sold


DAX Xetra (cash index)

A corrective downtrend channel continues to pull the DAX lower as momentum in the resumed sell-off grows.

With a run of lower highs and lower lows taking hold, the market is now back below the support band 12,100/12,130 following a gap lower today.

Friday’s decisive solid bearish candle reflects the negative sentiment that is developing on the DAX which increasingly has intraday rallies being sold into.

The market gapped to the bottom of the trend channel today and this is a gap that needs to be filled at 12,103 but any move to unwind the initial sell-off today should be seen as another opportunity to sell.

A close below 12,100 today would certainly leave the market at risk of a retreat to test the 11,865 September low.

Momentum indicators are taking an increasingly corrective configuration now with the Stochastics accelerating lower, RSI below 40 and most concerning for the bulls, a MACD sell signal.

  • Initial resistance is at today’s initial high at 12,072 whilst the gap is still open at 12,103 and the hourly chart shows a sell zone of overhead supply around 12,170/12,190.
  • There is minor support at 11,952 which protects 11,865.

 


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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.